In a study of the metabolic implications of the large placental-to-fetal mass ratio that characterizes early fetal development, fetal plasma lactate disposal rate and CO2 production from fetal plasma lactate by fetus and placenta were measured in six midgestation (71-80 days) pregnant sheep. A constant fetal intravenous infusion of L-[U-14C]lactate and 3H2O was given to establish fetal steady-state lactate specific activity and to measure uterine and umbilical blood flows. Fetal and placental weights were 158.6 +/- 19.7 and 441.9 +/- 32.7 g, respectively. There was a significant net lactate flux into the uterine circulation (31 +/- 4.3 mumol/min, P < 0.01) but no measurable umbilical uptake. Fetal plasma lactate disposal rate was 21.2 +/- 2.7 mumol/min, approximately one-half of which represented fetal lactate flux into the placenta (9.9 +/- 1.9 mumol/min). The oxidation rate of tracer lactate carbon to 14CO2 by placenta plus fetus was 72.6 +/- 4.7% of the infused tracer and was fairly evenly distributed between the placenta and the fetus (42.4 +/- 3.9 vs. 30.3 +/- 2.2%). The midgestation placenta metabolizes and produces fetal plasma lactate at rapid and nearly equal rates. This contrasts with the late-gestation placenta, which makes a small contribution to fetal lactate disposal and is a major net source of fetal lactate.