Arginine vasopressin (AVP) is a peptide hormone which is found in neurons within the paraventricular (PVN) and the supraoptic (SON) nuclei of the hypothalamus. In fetal sheep, this neuropeptide is involved in maturational processes and adaptive responses to 'stress'. This study examined the effect of age on the total number and distribution of AVP-containing neurons in the PVN and SON of fetal sheep and newborn lambs by quantitative light-microscopic immunocytochemistry. Serial coronal sections of hypothalami from three groups of animals were studied: fetuses at 104-109 days of gestation (n = 6) comprising the early group, fetuses at 130-139 days of gestation (n = 5) comprising the late group and newborn lambs at 12-20 postnatal days (n = 5) comprising the neonatal group. This period of development was chosen since adaptive mechanisms to stress are operative at or near the time of birth. Hypothalamic dimensions were measured to determine if maturation had an effect on the size of the AVP-containing subregions of the hypothalamus during this period of development. Dimensions included: ventricle height, optic chiasm width, distances from the dorsal margin of the ventricle to the lateral and medial margins of the optic tract, and distance between the medial margins of the optic tracts. As expected, with increase in maturational age, overall dimensions of the AVP-containing subregions increased significantly (p < 0.05). When early- and late-gestation fetuses were compared to newborn lambs, there was a significant increase in the total number of immunoreactive neurons in both the PVN (p < 0.01, Anova) and SON (p < 0.001, Anova) with age. With advancing age, we also observed an increase in the density of AVP neurons in the middle subregion of the PVN and in the midrostral subregion of the SON. These data suggest that, during the late gestational and early postnatal period, de novo synthesis of AVP genes occurs in these hypothalamic nuclei. This study provides a baseline for further investigation to study the effects of stress on these neurons in the developing ovine fetus and newborn lamb.