Experimental maternal allergic asthma in sheep provides an experimental model in which to test impacts on progeny. Fetuses from allergic asthmatic ewes had fewer surfactant-producing cells in lungs. A greater proportion of lymphocytes from thymus were CD44 positive in fetuses from allergic asthmatic ewes than in controls. These changes to fetal development might contribute to poor neonatal lung function and increased risk of allergy seen in offspring of pregnancies complicated by asthma. Asthma is prevalent in pregnancy and increases the risk of disease in offspring, including neonatal respiratory distress and childhood asthma and allergy, but the mechanisms are not understood. We hypothesized that fetal lung structure and immune phenotype in late gestation fetal sheep would be impaired in our sheep model of maternal allergic asthma during pregnancy. Singleton-bearing ewes were either sensitized before pregnancy to house dust mite (HDM, allergic, n=7) or were non-allergic (control, n=5). The ewes were subsequently subjected to repeated airway challenges with HDM (allergic group) or saline (control group) throughout gestation. Tissues were collected at 140±1days gestational age (term, ∼147days). The density of type II alveolar epithelial cells (surfactant protein C-immunostained) in the lungs was 30% lower in fetuses from allergic ewes than in controls (P<0.001), but tissue-to-air space ratio and numbers of leucocytes and macrophages were not different between groups. The proportion of CD44+ lymphocytes in the fetal thymus was 3.5-fold higher in fetuses from allergic ewes than in control ewes (P=0.043). Fewer surfactant-producing type II alveolar epithelial cells may contribute to the increased risk of neonatal respiratory distress in infants of asthmatic mothers, suggesting that interventions to promote lung maturation could improve their neonatal outcomes. If the elevated lymphocyte expression of CD44 persists postnatally, this would confer greater susceptibility to allergic diseases in progeny of asthmatic mothers, consistent with observations in humans. Further experiments are needed to evaluate postnatal phenotypes of progeny and investigate potential interventions.