Fetal insulin secretion is inhibited by acute hypoxemia. The relationship between prolonged hypoxemia and insulin secretion, however, is less well defined. To test the hypothesis that prolonged fetal hypoxemia impairs insulin secretion, studies were performed in sheep fetuses that were bled to anemic conditions for 9 ± 0 days (anemic, n=19) and compared to control fetuses (n=15). Arterial hematocrit and oxygen content were 34% and 52% lower, respectively, in anemic vs. control fetuses (P<0.0001). Plasma glucose concentrations were 21% higher in the anemic group (P<0.05). Plasma norepinephrine and cortisol concentrations increased 70% in the anemic group (P<0.05). Glucose-, arginine-, and leucine-stimulated insulin secretion all were lower (P<0.05) in anemic fetuses. No differences in pancreatic islet size or β-cell mass were found. In vitro, isolated islets from anemic fetuses secreted insulin in response to glucose and leucine as well as control fetal islets. These findings indicate a functional islet defect in anemic fetuses which likely involves direct effects of low oxygen and/or increased norepinephrine on insulin release. In pregnancies complicated by chronic fetal hypoxemia, increasing fetal oxygen concentrations may improve insulin secretion.