ExtractAn indicator-dilution method is described for measuring fetal pulmonary fluid, FPF, volume (Ve), and volume change with time (VS) in the lamb fetus in utero. The indicator, albumin, which is the predominant protein of normal FPF, was administered directly to FPF in the form of radioiodinated human serum albumin (RISA). We have shown that (I) RISA is disbributed homogeneously throughout the FPF compartment, (2) it is not altered within FPF, (3) it does not alter the functional characteristics of FPF, and (4) it remains within the FPF compartment throughout the period of measurement. Ve varies directly with the weight of the fetus so that Ve per kilogram was 31.6-35.6 ml/kg in four of five fetuses. The Ve per kilogram was lower in one fetus at the start of the experiment but increased rapidly to 29.0 ml/kg within 45 min. Thus the relaxation volume of the fetus in utero is in the range of functional residual capacity (FRC) and thoracic gas volume of the air-breathing neonate, which indicates that the pulmonary transformation at birth is, in essence, an isovolumic change in state wherein the fetal liquid-lung becomes the neonatal air-lung. The rate at which FPF is formed (Vs) is about 1.5 ml/hr-kg; however, the rate may change in so far as both rapid increases and rapid decreases of FPF volume were observed. When breathing movements were induced in the fetus by stimulation of the sciatic nerve, FPF volume decreased rapidly (Vs = -3.0 ml/hrkg), which indicates that negative intrathoracic pressures promote its resorption. When FPF volume fell transiently or was low initially, there was subsequent rapid restoration of volume to the range of anticipated FRC.