Although dynorphin has long been considered an endogenous opioid peptide with high affinity for the kappa-opioid receptor, its biological function remains uncertain. The high concentration of dynorphin peptides and kappa-opioid receptors in the hypothalamus suggest a possible role for dynorphin in neuroendocrine regulation. This review will summarize evidence that support a role for dynorphin in regulation of the developing hypothalamo-pituitary-adrenal (HPA) axis. Dynorphin can exert dual actions on adrenocorticotropin (ACTH) release: (i) via activation of hypothalamic kappa-opioid receptors leading to release of corticotropin-releasing hormone (CRH) and arginine vasopressin (AVP), and (ii) via a non-opioid mechanism that involves N-methyl-D-aspartate (NMDA) receptors and prostaglandins, and which is not dependent on CRH or AVP. The primary site of action of dynorphin and NMDA appears to be the fetal hypothalamus or a supra-hypothalamic site. The non-opioid mechanism does not mature until a few days prior to parturition and is active for only the brief perinatal period. In contrast, the opioid mechanism behaves as a constitutive system with sustained activity from prenatal to postnatal life. It is likely that the two mechanisms may respond to different stress stimuli and play a different role during development.