This study examines the effect of ambient temperature on lung development over the first month of postnatal life in lambs treated with a drug which inhibits thyroid hormone synthesis (methimazole, 50 mg day-1 (kg body wt-1)). Twin lambs were hand-reared at a fixed level of nutrition in either a warm (WR, 25 degrees C) or cool (CR, 10-15 degrees C) ambient temperature. Plasma thyroid hormone concentrations were significantly (P < 0.05) lower in WR lambs, but there were no differences between WR and CR groups in thyroid gland weight or hepatic iodothyronine 5'-deiodinase activity at 8 or 29 days of age. Lung weights and the ratio of lung weight to O2 consumption were similar in WR and CR groups at 8 days but both were significantly lower (P < 0.01) in CR lambs at 29 days. Lung weight at 29 days was significantly (P = 0.002) correlated with plasma triiodothyronine concentration in CR but not WR lambs, and laryngeal braking of expiratory airflow was observed in three of seven CR lambs but not in WR lambs. Four WR, but no CR, lambs exhibited a rapid deterioration in health or died unexpectedly between 14 and 21 days of age. These WR lambs were characterized by having small lungs and slower growth rates. It is concluded that in WR lambs chronically treated with methimazole, both lung development and the ability of an individual to adapt effectively to methimazole treatment are compromised. In CR lambs, although lung growth may be reduced this does not appear to compromise O2 consumption or health.