Intrauterine growth retardation has been produced experimentally by umbilical placental embolization for 9 days (early intrauterine growth retardation) in pregnant sheep. Fetuses with early intrauterine growth retardation had a 20% decrease in mean body weight and 33% decrease in placental blood flow. However, the regional blood flow distribution was not significantly different at rest between the embolized and normally grown fetuses despite the 39% decrease in fetal arterial oxygen content. The purpose of this study was to determine the circulatory responses to acute hypoxemic stress in the early development of intrauterine growth retardation. We found that the regional blood flow distribution was not significantly different during imposed acute hypoxemia between the seven fetuses with early intrauterine growth retardation and seven nonembolized normally grown fetuses. We conclude that growth-retarded fetuses are able to meet basal metabolic oxygen requirements and to respond normally to imposed acute hypoxemia until the placental circulatory reserve capacity is depleted.