Placental O2 transport was studied in seven fetal lambs before and after occluding one of the two umbilical arteries. Ethanol was used to measure uterine and umbilical blood flows using the steady-state transplacental diffusion method. Blood samples were drawn from umbilical artery, umbilical vein, both uterine veins, and maternal artery and analyzed for blood flow indicator, O2 content, PO2, PCO2, and pH. Occlusion reduced the placental mass and the uterine blood flow, which was available for transplacental exchange, to 49.5 and 46.5% of control, respectively. After occlusion, fetal blood pressure increased 38%, total umbilical blood flow decreased 25%, total fetal O2 uptake decreased 26%, fetal blood flow to the unoccluded placenta increased 52%, and the O2 flux from unoccluded placenta to fetus increased 49%. This increased flux was accompanied by a decrease in the PO2 of maternal venous blood from the unoccluded placenta and an enlargement of the transplacental PO2 gradient, resulting in a marked drop in umbilical venous PO2 (28.3 to 17.7 Torr). This evidence supports the hypothesis that placental O2 diffusing capacity is a limiting factor in placental O2 transport and agrees with other studies indicating the absence of homeostatic mechanisms for preventing acute changes of PO2 in the placental circulation.