SUMMARY1. Twenty-seven unanaesthetized new-born lambs, 6 hr-10 days old, responded to two levels of inspired oxygen, 125 and 110 mm Hg (alveolar CO2 being controlled) with a sustained increase in minute ventilation (1), a small increase in heart rate and a less consistent rise in systemic blood pressure.2. An increase in v was observed when arterial oxygen tension (Pa, 02) had fallen by 6-15 mm Hg. There appeared to be no fixed threshold of Pa,°a t which ventilation started to increase.3. The increase in ventilation caused by these levels of hypoxia was significantly and directly related to the age of the lamb and to its control alveolar C02.4. More severe hypoxia caused a progressive increase in v until Pa, 02 was about 25 mm Hg when respiration failed. This increase at P., 02 > 25 mm Hg was markedly potentiated when alveolar PCO2 (PA,co2) was increased and abolished after bilateral denervation of the carotid chemoreceptors.5. Significant (> 10%) left-to-right shunts were found in ten out of twelve lambs lightly anaesthetized with pentobarbitone sodium, breathing air. Hypoxia diminished the left-to-right pressure gradient largely by its pressor effect on the pulmonary circulation. When inspired 02 tension (P, 02) was 70 mm Hg, all seven lambs studied showed a reversal of the pressure gradient and evidence of right-to-left shunts (11-42 %) across the ductus arteriosus.6. The implications of these findings have been discussed with reference * This study was supported in part by USPHS grant HE-06285.