Target cell metabolism of glucocorticoids is now recognized as an important modulator of ligand access to the glucocorticoid receptor (GR). This metabolism occurs via two distinct 11beta-hydroxysteroid dehydrogenase (11beta-HSD) enzymes (types 1 and 2) that catalyze interconversion of active glucocorticoids (cortisol and corticosterone) and their inactive 11-keto products (cortisone and 11-dehydrocorticosterone, respectively). The focus of this review is on the biology of the 11beta-HSD enzymes in the placenta, where they also regulate passage of maternal glucocorticoids to the fetus. The presence of this metabolic barrier at the maternal-fetal interface is potentially crucial to fetal growth and development, since maternal glucocorticoid levels are elevated in pregnancy and since excess glucocorticoid exposure in fetal life has detrimental effects on prenatal growth and increases susceptibility to disease in subsequent adult life. In primates, transplacental glucocorticoid passage also appears to play an important role in the induction of an autonomous fetal hypothalamic-pituitary-adrenal axis near term. Placental 11beta-HSD is also likely to modulate glucocorticoid actions within the placenta, per se, by regulating their access to placental GR. Moreover, because some progesterone effects are exerted via the GR, placental 11beta-HSD may regulate progesterone-glucocorticoid competition for access to this receptor and thereby affect the biological actions of both steroids in the placenta.