Intracellular lipolytic activity and lipoprotein lipase activity were determined in healthy human placental tissue, in placentas obtained from patients with severe pre-eclampsia, and from cases of intra-uterine growth retardation. The level of lipoprotein lipase, which is responsible for the transfer of fatty acids across membranes, was found to be much higher compared with the intracellular lipase and had increased further during pregnancy. Lipoprotein lipase activity was significantly greater in placentas of pre-eclamptic women and in the placentas of intra-uterine growth retarded fetuses. The intracellular lipolytic activity was significantly lower, however, than in controls. The levels of triglycerides and cholesterol were significantly higher in the cord blood of newbornes of women who had pre-eclampsia and in the intra-uterine growth retarded fetuses. The present study indicates that in situations causing fetal distress there are changes in the placenta leading to an increased supply of free fatty acids to the fetus. The role of lipids in fetal metabolism and their transfer across the placenta are poorly understood. The main precursor of fetal lipids in man is believed to be either carbohydrate (5) or maternal blood lipids (10). There is no evidence for the trans-placental flow of intact triglycerides. The plasma free fatty acids (FFA) constitute the only lipid fraction known to cross the placenta and could supply a significant proportion of the fetal requirements (8, 19).