When ethanol was administered intravenously to pregnant monkeys, a transient but marked collapse of umbilical vasculature was observed uniformly within about 15 minutes. The ethanol-induced impairment of umbilical circulation produced severe hypoxia and acidosis in the fetus; recovery occurred during the succeeding hour. This striking interruption of feto-placental circulation may explain one of the mechanisms of mental retardation, a frequent manifestation in children afflicted with fetal alcohol syndrome.