We evaluated the effects of alterations in fetal hematocrit on fetal oxygenation in 10 chronically catheterized fetal lambs. Hematocrit was varied from 10% to 55% by slow isovolemic exchange transfusions with plasma or packed red blood cells obtained freshly from donor fetuses. At each hematocrit studied, we measured umbilical blood flow (Qumb) and the oxygen concentrations in umbilical venous blood (CUVO2) and arterial blood (CAO2) and calculated fetal oxygen delivery (Qumb X CUVO2), oxygen extraction [(CUVO2 - CAO2)/CUVO2], and oxygen consumption [Qumb (CUVO2 - CAO2)]. Fetal oxygen delivery was maximal at a fetal hematocrit of 33% (mean oxygen delivery = 23 ml of oxygen per minute per kilogram of fetus) and decreased as hematocrit was raised or lowered from that value. Despite these reductions in oxygen delivery, fetal oxygen consumption was relatively stable (at about 7 ml of oxygen per minute per kilogram) at hematocrits ranging from about 16% to 48% because of compensatory increases in fetal oxygen extraction. Regardless of whether oxygen delivery decreased because of anemia or polycythemia, fetal oxygen consumption was maintained as long as oxygen delivery was greater than about 14 ml of oxygen per minute per kilogram of fetus. When oxygen delivery was less than 14 ml of oxygen per minute per kilogram, fetal oxygen consumption fell while arterial blood base deficit increased, indicating that oxygen supply was inadequate for fetal oxygen demands. These results indicate that fetal aerobic metabolism can be sustained over a wide range of fetal hematocrits. Furthermore, our data support the concept that the level of fetal oxygen delivery is an important determinant of the adequacy of fetal oxygenation.