The primary function of the circulatory system of both the fetus and newborn is to deliver oxygen to metabolizing organs and return deoxygenated blood to the gas exchange organ to replenish the oxygen and eliminate the waste product CO2. In the fetus, the gas exchange organ is the placenta, and its vascular connections are in a parallel arrangement with the other systemic organs, remote from the pulmonary circulation. In order to supply deoxygenated blood to the placenta and return oxygenated blood to the systemic organs, a series of extracardiac shunts (ductus venosus, ductus arteriosus) and an intracardiac communication (foramen ovale) are necessary. With birth, the function of gas exchange is transferred from the placenta to the lungs, and therefore from the systemic circulation to the pulmonary circulation. The venous and arterial circulations are separated, and not only are the fetal shunts unnecessary, but their persistence may lead to circulatory compromise. The transition from the fetal to the neonatal circulation thus includes elimination of the placental circulation, lung expansion, and increase in lung blood flow so that the entire cardiac output can be accommodated, and closure of the foramen ovale, ductus arteriosus, and ductus venosus. For most congenital structural heart disease, the fetal shunt pathways allow redistribution of ventricular blood flows so that systemic blood flow is adequate and fetal growth and development are usually normal. Uncomplicated VSDs do not alter the circulation significantly in either the fetus or immediate newborn period, with the important exception of premature infants. With severe left heart obstruction, the burden of systemic and pulmonary blood flow is transferred to the fetal right ventricle, with reversal of blood flow at the foramen ovale, and systemic blood flow almost entirely transmitted via the ductus arteriosus. This "ductal-dependent" systemic circulation is poorly tolerated in the newborn, because normal closure of the ductus arteriosus progressively decreases systemic blood flow and progresses to circulatory failure and shock. Severe right heart obstruction is also well tolerated in the fetus, because the combined fetal cardiac output can be transferred to the aorta, with the ductus arteriosus supplying predominantly lung blood flow. After birth, such "ductal-dependent" pulmonary blood flow can lead to critically low levels of pulmonary blood flow and severe cyanosis with closure of the ductus arteriosus. An understanding of fetal hemodynamics and the acute and chronic changes that occur with transition to the newborn circulation are important for the care of normal newborns and are crucial to the recognition, diagnosis, and management of the newborn with significant congenital heart disease.