Fetal growth restriction (FGR), reflective of an adverse intrauterine environment, confers a significantly increased risk of perinatal mortality and morbidity. In addition, low birth weight associates with adult diseases including hypertension, metabolic dysfunction and behavioural disorders. Glucocorticoids are critical for fetal development, however exposure of the fetus to excess glucocorticoids reduces fetal growth and can permanently alter organ structure and function, predisposing to disease in later life. Fetal glucocorticoid exposure is regulated, at least in part, by the enzyme 11β-hydroxysteroid dehydrogenase type 2 (11β-HSD2), which catalyzes the intracellular inactivation of glucocorticoids. This enzyme is highly expressed within the placenta at the maternal-fetal interface, limiting passage of glucocorticoids to the fetus. Expression of 11β-HSD2 is also high in fetal tissues, particularly within the developing central nervous system (CNS). Down-regulation or genetic deficiency of placental 11β-HSD2 is associated with significant reductions in fetal growth and birth weight, and programmed outcomes in adulthood. We have shown that in addition to reducing the passage of glucocorticoids, 11β-HSD2 plays a key role in regulating placental function through modulation of local glucocorticoid levels, affecting placental vascularization, blood flow and transport capacity. Endogenous placental 11β-HSD2 activity can also be modulated by maternal stressors (such as poor diet), suggesting that regulation of glucocorticoid metabolism may play a part in feto-placental adaptation to adverse conditions. The question still remains as to whether it is placental or fetal 11β-HSD2 that are key to subsequent programmed outcomes. A recently developed knockout of 11β-HSD2 specifically within the CNS during development suggests that neural 11β-HSD2 does indeed have a role in protecting the developing brain and thus determining adult behavioural outcomes. This may prove to be a partial role (additive to that of 11β-HSD2 in the placenta), as the phenotype appears more subtle than the global 11β-HSD2 knockout. Thus, alterations in 11β-HSD2 within both fetal and placental tissues affects growth and development during the perinatal period, and influences the life-long health of an individual.