We studied the pulmonary vascular response to hypoxia and associated transvascular flux of fluid into the lungs of newborn lambs. After a 2-hour baseline period, 14 unanesthetized lambs, 1-3 weeks old, breathed 10-12% oxygen in nitrogen for 3-6 hours. We measured steady state lung lymph flow, pulmonary arterial and left atrial pressures, blood flow to the lungs, and the concentration of protein in lymph and plasma. As Pao2decreased from 81 ± 3 torr to 32 ± 1 torr, pressure in the pulmonary artery almost doubled, left atrial pressure was unchanged, and pulmonary blood flow increased by 14%. Calculated pulmonary vascular resistance increased by 69%. Contrary to results of previous experiments performed with mature sheep, lymph flow increased by 80%, and the concentration of protein in lymph decreased during hypoxia. These results suggest that hypoxia increased the pulmonary transvascular gradient of hydraulic pressure in the lambs, increasing filtration of fluid into the lungs. Possible explanations are that pulmonary vasconstriction during hypoxia (1) occurred distal to the sites of transvascular fluid flux or (2) redistributed the increased blood flow to fewer lung vessels, thereby increasing intravascular pressure at the sites of fluid exchange. Postmortem lung blood content was significantly less than that of control lambs, but there was no difference in extravascular lung water content or lung histology, suggesting that pulmonary lymph flow kept pace with transvascular filtration of fluid and prevented pulmonary edema. The concentration of protein in lymph relative to that in plasma decreased with hypoxia, and the ratio of [albumin] to [globulin] in lymph was unchanged, indicating that sustained alveolar hypoxia of this magnitude had no demonstrable effect on the sieving characteristics of the pulmonary endothelium of the lambs.