The premature infant is at increased risk of cerebral white matter injury. Melatonin is neuroprotective in adult models of focal cerebral ischemia and attenuates ibotenate-induced white matter cysts in neonatal mice. Clinically, melatonin has been used to treat sleep disorders in children without major side effects. The aim of this study was to investigate the protective and anti-inflammatory effects of melatonin in the immature brain following intrauterine asphyxia. Fetal sheep at 90 d of gestation were subjected to umbilical cord occlusion. Melatonin (20 mg/kg, n = 9) or vehicle (n = 10) was administered IV to the fetus, starting 10 min after the start of reperfusion and continued for 6 h. Melatonin treatment resulted in a slower recovery of fetal blood pressure following umbilical cord occlusion, but without changes in fetal heart rate, acid base status or mortality. The production of 8-isoprostanes following umbilical cord occlusion was attenuated and there was a reduction in the number of activated microglia cells and TUNEL-positive cells in melatonin treated fetuses, suggesting a protective effect of melatonin. In conclusion, this study shows that melatonin attenuates cell death in the fetal brain in association with a reduced inflammatory response in the blood and the brain following intrauterine asphyxia in mid-gestation fetal sheep.