During the perinatal period, prostaglandin (PG) E2 levels show parallel changes in cerebrospinal fluid (CSF) and blood which may be important for the adaptation of the fetus to extrauterine life. It is not known, however, whether PGE2 in the CSF originates from a local or a peripheral source. Experiments were carried out in term fetal and newborn sheep chronically instrumented with a cannula inside the third ventricle and vascular lines. Indomethacin was given intracerebroventricularly (i.c.v.) (50 or 100 micrograms at hourly intervals), alone or in combination with intravenous (i.v.) PGE2 (1 or 1.5 micrograms/kg/min). In the fetus, i.c.v. indomethacin reduced PGE2 levels in both CSF and plasma. Conversely, no significant change was noted at either site when indomethacin was given i.c.v. to the newborn. At both ages, PGE2 increased in the CSF during i.v. infusion of the compound, but this elevation was proportionately smaller than in plasma. We conclude that, in the perinatal period, brain and peripheral circulation function as separate compartments with respect to PGE2, though there is passage of the compound across the blood-brain barrier. Results provide indirect evidence that perinatal brain produces PGE2 in measurable amounts.