The effects of cortisol on hepatic GH receptor and insulin-like growth factor-I (IGF-I) gene expression were investigated in sheep fetuses during late gestation and after experimental manipulation of plasma cortisol levels by fetal adrenalectomy and exogenous infusion of cortisol. Hepatic GH receptor and IGF-I messenger RNA (mRNA) levels increased with increasing gestational age in parallel with the normal rise in fetal cortisol levels toward term (145 +/- 2 days). These increases in mRNA abundance toward term were prevented when the prepartum cortisol surge was abolished by fetal adrenalectomy and were stimulated prematurely in fetuses younger than 130 days by exogenous infusion of cortisol. Both the class 1 and class 2 transcripts of the IGF-I gene were increased when cortisol levels were elevated either endogenously or exogenously. However, there were no significant changes in fetal plasma IGF-I levels either with increasing gestational age or in response to experimental manipulation of the fetal cortisol level. When the data from all the fetuses were combined irrespective of treatment or gestational age, there were significant positive correlations between the log plasma cortisol concentration in utero and the abundance of GH receptor and IGF-I mRNA in the fetal liver. There was also a significant inverse relationship between log plasma cortisol and the ratio of class 1 to class 2 transcript abundance in the fetal liver. These findings show that cortisol is a physiological regulator of hepatic GH receptor and IGF-I gene expression in fetal sheep during late gestation and indicate that it preferentially increases the class 2 transcript of the IGF-I gene. The prepartum cortisol surge therefore appears to have an important maturational role in initiating the perinatal switch from the fetal to adult modes of somatotrophic regulation.