Glucocorticoid hormones may play a critical role in initiating parturition in tammar wallabies. In this study, we investigated the concentration of cortisol in fetal fluids and cortisol production by fetal adrenals over the last 3 days of the 26-day pregnancy and within 24 h postpartum. The fetal adrenals almost doubled in size between Days 24 and 26 of pregnancy, and their cortisol content increased over 10-fold during this period, from 10 pg to over 100 pg per adrenal pair. After birth, neonatal adrenals continued to grow, but cortisol content fell dramatically to 20 pg. The prepartum increase in adrenal cortisol was reflected by a substantial rise in cortisol concentrations in yolk sac fluid, allantoic fluid, and fetal blood, which were below 10 ng/ml on Day 24 and rose to over 40 ng/ml by Day 26. Cortisol concentrations in neonatal blood decreased postpartum, mirroring decreased cortisol content in neonatal adrenals. Cortisol production by the fetal adrenal was stimulated in vitro by ACTH and prostaglandin E2, suggesting that the in vivo increase may be stimulated by release of ACTH from the fetal hypothalamic-pituitary axis and prostaglandin E2 from the placenta. These results indicate that increasing cortisol production by the fetal adrenal is a characteristic of late pregnancy in the tammar wallaby and support the suggestion that fetal cortisol may trigger the initiation of parturition in this marsupial species.