At birth, pulmonary vascular resistance decreases dramatically, allowing pulmonary blood flow to increase and oxygen exchange to occur in the lungs. To determine the extent to which ventilation of the fetus's lungs, oxygenation of the lungs, and umbilical cord occlusion can account for this decrease in resistance, we studied 16 chronically instrumented, near-term sheep fetuses inutero. We performed the experiment in a sequential fashion: we first studied the effects of ventilation alone (without oxygenation) on pulmonary vascular resistance and blood flow, and then determined the additive effects of oxygenation and cord occlusion. We calculated pulmonary vascular resistance from measurements of vascular pressures and measurements of pulmonary blood flow obtained by injecting radionuclide-labeled microspheres. We found that ventilation alone caused a large but variable increase in pulmonary blood flow, to 401% of control, no change in pulmonary arterial pressure, and a doubling of left atrial pressure. Thus, pulmonary vascular resistance fell dramatically, to 34% of control. Oxygenation caused a modest further increase in pulmonary blood flow and a decrease in mean pulmonary arterial pressure, so resistance fell to 10% of control. Umbilical cord occlusion caused no further changes in pressure, flow, or resistance. Unexpectedly, the fetuses' pulmonary blood flow responses to ventilation fell into two groups: the mean increase was maximal in eight of the 16 fetuses but was only 20% of the cumulative increase in the other eight. We found no differences between the two groups of fetuses to explain their different responses. We conclude that ventilation and oxygenation together can account for the decrease in pulmonary vascular resistance to levels that occur at birth. Moreover, ventilation alone can account for most of this decrease.