OBJECTIVE To test the hypothesis that a nuchal cord has a significant effect upon fetal cerebral haemodynamics and oxygenation during labour. METHODS A specially designed optical probe was inserted through the dilated cervix and placed against the scalp of 37 fetuses during labour in a teaching hospital obstetric unit. Changes in total cerebral haemoglobin concentration were measured continuously together with fetal heart rate and uterine contraction frequency during the first and second stages. RESULTS At birth 11 fetuses (30%) were noted to have a nuchal cord (cord around the neck). For these, significantly more contractions were associated with an increase in total cerebral haemoglobin concentration when compared with the control fetuses without a nuchal cord (40.2% (S.D.19.5) vs 5.9% (S.D.7.1), P < 0.001). A significantly greater number of variable decelerations was found in the nuchal cord group (4 per 30 min vs. 2 per 30 min in the controls) (P < 0.01). There was no significant difference between mean cerebral oxygen saturation determined at the end of the first stage of labour, which was 47.0% (S.D.13.3) and 50.1% (S.D.11.8) for the nuchal cord and control groups, respectively. CONCLUSIONS A nuchal cord was associated with a significant increase in cerebral blood volume during uterine contractions, without any significant effect upon cerebral oxygenation.