To examine the influence of a prenatal increase in plasma cortisol concentration on perinatal initiation of hepatic gluconeogenesis, we infused cortisol into seven fetal sheep at 137-140 days gestation. 14C-Lactate provided tracer substrate for estimation of gluconeogenesis. We measured hepatic blood flow using radionuclide-labeled microspheres. After delivery, fetal arterial blood glucose concentration (1.33 +/- 0.4 mmol/l) increased transiently, but returned to fetal levels within 1 h after delivery. Substantial hepatic gluconeogenesis was induced in the fetus after cortisol infusion, averaging 23.4 +/- 12.2 mumol/min/100 g liver (7.8 +/- 4.4 mumol/min/kg fetal weight). Fetal hepatic glucose output was 44.4 +/- 17.7 mumol/min/100 g liver. Hepatic glucose output did not change after delivery; estimated gluconeogenesis decreased immediately, then increased by 6 h after delivery. Lactate supply to the liver fell substantially, from 1.1 +/- 0.4 mmol/min/100 g in the fetus to 0.24 +/- 0.09 at 1 h after delivery. Lactate flux across the liver decreased from 75.3 +/- 23 mumol/min/100 g in the fetus to 20.2 +/- 15.7 at 1 h after delivery. Hepatic lactate flux was significantly related to gluconeogenesis (r = 0.734, P = 0.0001). We conclude that cortisol induces substantial hepatic gluconeogenesis in fetal sheep near term. After delivery, there appears to be a transient decline in gluconeogenesis from lactate, which may be secondary to limited hepatic oxygen and substrate supply. Onset of gluconeogenesis in the fetus fails to sustain increases in either fetal or postnatal blood glucose concentrations.