Women are at greatest risk of suffering from depression during the childbearing years and thus may either become pregnant while taking an antidepressant or may require a prescription for one during pregnancy. The antidepressant fluoxetine (FX) is a selective serotonin reuptake inhibitor (SSRI), which increases serotonin neurotransmission. Serotonin is involved in the regulation of a variety of physiological systems, including the sleep-wake cycle, circadian rhythms and the hypothalamic-pituitary-adrenal axis. Each of these systems also plays an important role in fetal development. Compared with other antidepressant drugs, the SSRIs, such as FX, have fewer side effects. Because of this, they are now frequently prescribed, especially during pregnancy. Clinical studies suggest poor neonatal outcome after exposure to FX in utero. Recent studies in the sheep fetus describe the physiological effects of in utero exposure to FX with an 8 day infusion during late gestation in the sheep. This is a useful model for determining the effects of FX on fetal physiology. The fetus can be studied for weeks in its normal intrauterine environment with serial sampling of blood, thus permitting detailed studies of drug disposition in both mother and fetus combined with monitoring of fetal behavioural state and cardiovascular function. Fluoxetine causes an acute increase in plasma serotonin levels, leading to a transient reduction in uterine blood flow. This, in turn, reduces the delivery of oxygen and nutrients to the fetus, thereby presenting a mechanism for reducing growth and/or eliciting preterm delivery. Moreover, because FX crosses the placenta, the fetus is exposed directly to FX, as well as to the effects of the drug on the mother. Fluoxetine increases high-voltage/non-rapid eye movement behavioural state in the fetus after both acute and chronic exposure and, thus, may interfere with normal fetal neurodevelopment. Fluoxetine also alters hypothalamic function in the adult and increases the magnitude of the prepartum rise in fetal cortisol concentrations in sheep. Fetal FX exposure does not alter fetal circadian rhythms in melatonin or prolactin. Studies of the effects of FX exposure on fetal development in the sheep are important in defining possible physiological mechanisms that explain human clinical studies of birth outcomes after FX exposure. To date, there have been insufficient longer-term follow-up studies in any precocial species of offspring exposed to SSRIs in utero. Thus, further investigation of the long-term consequences of in utero exposure to FX and other SSRIs, as well as the mechanisms involved, are required for a complete understanding of the impact of these agents on development. This should involve studies in both humans and appropriate animal models.