The journey of human labor involves hypoxic and mechanical stresses as a result of progressively increasing frequency, duration and strength of uterine contractions and resultant compression of the umbilical cord. In addition, occlusion of the spiral arteries during myometrial contractions also leads to repetitive interruptions in the utero-placental circulation, predisposing a fetus to progressively worsening hypoxic stress as labor progresses. The vast majority of fetuses are equipped with compensatory mechanisms to withstand these hypoxic and mechanical stresses. They emerge unharmed at birth. However, some fetuses may sustain an antenatal injury or experience a chronic utero-placental insufficiency prior to the onset of labor. These may impair the fetus to compensate for the ongoing hypoxic stress secondary to ongoing uterine contractions. Non-hypoxic pathways of neurological damage such as chorioamnionitis, fetal anemia or an acute fetal hypovolemia may potentiate fetal neurological injury, especially in the presence of a super-imposed, additional hypoxic stress. The use of utero-tonic agents to induce or augment labor may increase the risk of hypoxic-ischemic injury. Clinicians need to move away from "pattern recognition" guidelines ("normal," "suspicious," "pathological"), and apply the knowledge of fetal physiology to differentiate fetal compensation from decompensation. Individualization of care is essential to optimize outcomes.