Perturbations in glucose metabolism in the fetus and in the neonate are a consistent finding in several different animal models of intrauterine growth retardation (IUGR) as well as in humans. Studies in rats who have undergone IUGR have shown decreased hepatic glycogen stores in the fetus and delayed induction of cytosolic phosphoenolpyruvate carboxykinase (PEPCK-C) at birth. Hepatic transcription factors CCAAT enhancer binding protein (C/EBP)alpha and C/EBPbeta and the increase in cyclic AMP at birth have been implicated in the initial appearance of PEPCK-C. We have examined the effect of IUGR induced by reduced maternal inspired oxygen (fractional inspired oxygen concentration 0.14) on a) the expression of genes for hepatic C/EBPalpha, C/EBPbeta, PEPCK-C and glycogen synthase; and b) transcription of the genes for C/EBPbeta and PEPCK-C by dibutyryl cyclic AMP in the fetus. Three days (d 18-21) of decrease in maternal inspired oxygen resulted in lower maternal arterial PO(2) and a lower birth weight of the pups (p < 0.01). Fetuses that underwent IUGR had significantly lower concentrations of plasma glucose, hepatic glycogen, and glycogen synthase mRNA and a higher hepatic lactate:pyruvate ratio. They also had lower levels of hepatic PEPCK-C mRNA at birth. The concentration of hepatic mRNA for C/EBPalpha and C/EBPbeta as well as the transcription factors themselves were not affected by the decreased maternal inspired oxygen. Fetal injection of dibutyryl cyclic AMP after 24 h of decreased maternal inspired oxygen (d 18-19) had no effect on the expression of C/EBPbeta. However, it resulted in an attenuated induction of PEPCK-C in the fetuses with IUGR. We speculate that a decrease in maternal inspired oxygen induced certain mediators, either in the mother or in the placenta, that caused lower fetal glucose concentration and affected the transcription of genes involved in fetal hepatic glucose metabolism. IUGR, as a result of decreased fractional inspired oxygen concentration may also be the consequence of pH-mediated changes in uterine blood flow. However, these remain to be examined in this experimental model.