Stressors are frequently encountered during the pregnancies of farm animals. The effects of thee stressors on the development and subsequent responses of the offspring has been poorly studied. In this study the authors subjected pregnant sheep (ewes) to either no stress or repeated isolation in the presence of a dog during the last five weeks of gestation. During their initial exposure to the dog while isolated from their flockmates the ewes had a significant increase in plasma cortisol. Although the ewes habituated to this stressor over several exposures, their unborn lambs were exposed to elevated levels of cortisol on several occasions. These ‘stressed’ lambs were larger at birth than those from unstressed ewes. The stressed lambs were also more explorative (at 8 mos of age) and had higher levels of cortisol (at 25 days of age) than the lambs from unstressed ewes. Exposure of a pregnant ewe to stressful conditions had significant effects on the physical and behavioural development of her lambs. These effects may be adaptive for the offspring, even though the experience represented a significant stress for their mother.