8-Phenyltheophylline (PT), a potent and specific inhibitor of adenosine receptors, was infused intra-arterially into unanesthetized fetal sheep to determine the role of adenosine in hypoxic inhibition of fetal breathing. PT in normoxic fetuses increased heart rate and the incidence of low-voltage electrocortical activity, rapid eye movements (REM), and breathing. Mean breath amplitude increased by 44%. Hypoxia (preductal arterial PO2 = 14 Torr) induced a metabolic acidemia, a transient bradycardia, and hypertension while virtually eliminating REM and breathing. PT administration during hypoxia enhanced the metabolic acidemia, blocked the bradycardia and hypertension, increased the incidence of REM and breathing, and elevated mean breath amplitude. The results indicate that 1) adenosine is involved in fetal glycolytic and cardiovascular responses to hypoxia, 2) activation of central adenosine receptors mediates about one-half the inhibitory effects of hypoxia on REM and breathing, and 3) the depression of breathing may critically depend on a hypoxia-induced reduction in phasic REM sleep.