Fetal growth is known to be correlated with the size of the placenta and the exchange surface area. Reduction in the growth of the materno-fetal exchange surface areas may be a mechanism by which the effects of maternal undernutrition on fetal growth are mediated. In the compact placenta of the guinea pig the exchange surface is equivalent to the peripheral labyrinth. The effect of a 40% reduction in maternal feed intake on the growth of the peripheral labyrinth was investigated in pregnant guinea pigs between gestational days 25 and 65. Fetal and placental weights were significantly reduced in the last trimester by 32% and 38% respectively (P < 0.01). Placental efficiency in early gestation was significantly impaired in restricted animals but equivalent to ad lib. fed controls by the last trimester. The volume of the peripheral labyrinth increased as a percentage of the total placental volume with gestational age. Restricted placentae tended to be composed of a smaller volume of peripheral labyrinth tissue in early gestation. It is suggested that maternal undernutrition results in an impaired or delayed expansion of the peripheral labyrinth in early gestation causing a reduction in placental efficiency. By the last trimester the weight of the peripheral labyrinth of restricted animals was reduced by 33% (P < 0.05). The weight of the peripheral labyrinth was also significantly correlated with fetal weight is limited by the size of the peripheral labyrinth in the later stages of gestation.