Background: Maternal psychosocial stress during pregnancy is associated with adverse neonatal outcomes. These outcomes result from changes in fetal brain development and lead to disrupted cognitive, behavioural and emotional development. The neurosteroid allopregnanolone has been shown to reduce neural excitability and aid in protecting the fetal brain from excitotoxic insults. The objectives of this study were to assess the effect of prenatal maternal stress on fetal brain development with and without maternal allopregnanolone treatment. Methods: Pregnant guinea pigs were subjected to stress induced by exposure to a strobe light at 50, 55, 60 and 65 days gestation. Salivary cortisol levels were measured before and after each exposure. Fetal brains were assessed for markers of brain development using immunohistochemistry and plasma allopregnanolone was measured by radioimmunoassay. Results: Female, but not male prenatal stress-exposed fetuses demonstrated higher brain-to-liver ratios (BLR). Male fetuses showed significantly reduced expression of myelin basic protein (MBP), glial fibrillary acidic protein (GFAP), and both males and females showed reduced expression of microtubule-associated protein 2 (MAP2). These markers were not affected by maternal allopregnanolone treatment. However, maternal allopregnanolone treatment resulted in an increase in fetal plasma allopregnanolone concentrations in control pregnancies but concentrations were not raised after prenatal stress exposure. Conclusions: These findings indicate that the effects of prenatal stress on fetal brain development are sexually dimorphic with more pronounced negative effects seen on male neurodevelopment. Allopregnanolone treatment was not effective in raising fetal plasma concentrations after prenatal stress suggesting a stress-induced dysregulation of neurosteroid pathways during gestation. Interestingly, this study directly implicates prenatal stress in the disruption of fetal neurosteroid levels, such that it may mediate some of the deleterious effects on fetal neurodevelopment by facilitating a deficit in normal endogenous neuroprotective mechanisms.