Intrauterine inflammation is associated with preterm birth and poor long-term cardiopulmonary outcomes. We aimed to determine the effect of intrauterine inflammation on the cardiopulmonary and cerebral haemodynamic transition at birth, and the response to subsequent haemodynamic challenge. Fetal instrumentation was performed at ∼112 days gestation (term is 147 days) for measurement of cardiopulmonary and cerebral haemodynamics. At 118 days, inflammation was induced by intra-amniotic administration of lipopolysaccharide (LPS; n = 7); controls (n = 5) received intra-amniotic saline. At 125 days lambs were delivered and mechanically ventilated. Arterial blood gases, pulmonary and systemic arterial blood pressures and flows were measured during the perinatal period. At 10 min a haemodynamic challenge was administered by increasing positive end-expiratory pressure. During the first 10 min after birth, LPS-exposed lambs had higher pulmonary vascular resistance and lower pulmonary blood flow and left ventricular output than controls. Carotid arterial blood flow was higher in LPS-exposed lambs than controls between 3 and 7 min after delivery, and cerebral oxygen delivery was higher at 5 min. During the haemodynamic challenge, pulmonary blood flow and left ventricular output were reduced in controls but not in LPS-exposed lambs; a transient reduction in brachiocephalic arterial pressure occurred in LPS-exposed lambs but not in controls. Intrauterine inflammation altered the cardiopulmonary and cerebral haemodynamic transition at birth and reduced the cardiopulmonary response to a haemodynamic challenge after birth. The transient reduction in brachiocephalic arterial pressure suggests intrauterine inflammation may alter cerebrovascular control following an increase in positive end-expiratory pressure.