The placental enzyme 11beta-hydroxysteroid dehydrogenase-2 (11beta-HSD2) transforms maternal cortisol to inactive cortisone. Fetal glucocorticoid excess due to reduced 11beta-HSD2 activity could make small preterm infants susceptible to early adrenal insufficiency when the maternal cortisol source is no longer sustained. We assessed whether placental 11beta-HSD2 activity is related to early adrenal insufficiency and postnatal clinical course in extremely low birth weight (<1000 g) infants. Mean gestational age of the 44 infants was 26.6 wk (range, 23.7-32.0), birth weight was 747 g (440-981), and relative birth weight was -1.9 SD (-4.9 to 1.0). We determined placental 11beta-HSD2 activity, baseline, and ACTH-stimulated cortisol and assessed illness severity by the Score of Neonatal Acute Physiology (SNAP). One standard deviation decrease in placental 11beta-HSD2 activity corresponded to a 1.85 (95% CI 0.55 to 3.14; p = 0.006) unit increase in SNAP score and 2.9 mm Hg decrease in minimum mean arterial pressure (95% CI 0.3 to 5.6 mm Hg; p = 0.03). Placental 11beta-HSD2 activity was not associated with cortisol concentrations, although the confidence interval of the ACTH-stimulated cortisol was close to zero: 1 SD increase corresponded to 17% (-18% to 49%) increase in ACTH-stimulated cortisol. Moreover, a 1 SD decrease in enzyme activity was associated with a hazard ratio for postnatal glucocorticoid treatment of 1.63 (95% CI 1.00 to 2.65); p = 0.05. In ELBW infants, lower placental 11beta-HSD2 activity is associated with more severe early postnatal illness and hypotension. Although an association with baseline or ACTH-stimulated cortisol was not seen, possible relationships with other components of the hypothalamic-pituitary-adrenal axis remain to be determined.