Background: Sufficient O2 supply to the brain is necessary for adequate cerebral energy metabolism, function and growth. Objectives: To elucidate the relation between changes in cerebral arterial O2 content and cerebral O2 supply and changes in the oxygenation state of cerebral hemoglobin, and to determine whether concentration changes in oxyhemoglobin ($Δ$cO2Hb), deoxyhemoglobin ($Δ$cHHb), and cerebral arterial oxygenation ($Δ$cHbD; the difference between $Δ$cO2Hb and $Δ$cHHb), and cerebral blood volume ($Δ$CBV) can be used to assess the decline in brain cell function during hypoxemia in lambs born near term. Methods: 17 preterm lambs were delivered at a mean gestational age of 133 days. Decreases in cerebral arterial oxygen content were induced by a stepwise reduction in inspired oxygen concentration. Mean values of all continuous variables were calculated over the last 180 s of each hypoxemic level. Cerebral arterial blood gases were analyzed at the end of each level to calculate cerebral arterial O2 content and cerebral O2 supply. Results: Changes in cerebral arterial O2 content and cerebral O2 supply were positively linearly related with $Δ$cO 2Hb and $Δ$cHbD, and negatively with $Δ$cHHb and the concentration changes in total hemoglobin. Electrocortical brain activity remained stable until the cO2Hb and cHbD decreased to >3.0 ± 0.9and >8.1 ± 1.9 (mean ± SD) $μ$mol/100 g, respectively, and cHHb and CBV increased to >4.3 ± 1.7 and 1.37 ± 0.48 ml/100 g, respectively, as compared to baseline. Conclusions: Changes in cerebral arterial O2 content and cerebral O2 supply are adequately reflected by changes in the oxygenation state of cerebral hemoglobin. Concentration changes in $Δ$cO2Hb, $Δ$cHHb, $Δ$cHbD and $Δ$CBV can be used to assess the decline in brain cell function during hypoxemia in lambs born near term. Copyright © 2005 S. Karger AG.