Our aim was to determine the mechanism whereby oligohydroamnios causes reduced fetal lung expansion and eventual lung hypoplasia. We studied 20 fetal sheep during 2 to 9 days of oligohydramnios produced by drainage of amniotic and allantoic fluids during the last third of gestation. Oligohydramnios led to a reversible reduction in lung liquid volume of 19.5% within 48 hours. During oligohydramnios tracheal pressure, relative to amniotic pressure, rose by 1.7 mm Hg (p less than 0.001); pressures also tended to rise in the fetal pleural space and abdomen, relative to amniotic pressure, and to fall in the amniotic sac. Pressure increments, relative to amniotic pressure, which normally occur in the fetal trachea, pleural cavity, and abdomen during nonlabor uterine contractions, were significantly increased by 1.9 to 2.5 mm Hg during oligohydramnios. Oligohydramnios increased flexion of the fetal thoracolumbar spine, quantified as a reduction in the ratio of spinal radius of curvature to spine length (0.76 in controls vs 0.40 after oligohydramnios, p less than 0.001). In three sets of twins, only the fetus exposed to oligohydramnios was affected. A similar degree of spinal flexion imposed on normal fetal sheep cadavers increased abdominal (1.6 mm Hg), pleural (1.5 mm Hg), and tracheal (2.0 mm Hg) pressure, and caused a significant reduction in fetal lung expansion. We conclude that oligohydramnios in fetal sheep increases spinal flexion, leading to compression of abdominal contents, upward displacement of the diaphragm, and lung compression, favoring loss of fetal lung liquid. These changes, which are accentuated during nonlabor uterine contractions and are reversible, may lead to pulmonary hypoplasia if prolonged.