Methyl iodide (MeI) induces fetotoxicity in New Zealand White (NZW) rabbits when maternal exposure occurs during a susceptible window late in gestation (gestation days [GD] 23-26). To identify the possible mode of action, comprehensive maternal and fetal bioanalysis and thyroid structure/function assessments were conducted in MeI-exposed (25 ppm by whole-body inhalation) and unexposed time-mated NZW rabbits (10/group) during GD 21-27. Key developmental events were observed within this window in unexposed fetuses, including the appearance of colloid in the thyroid follicular lumen and the detection of serum T(3) beginning on GD 22. Fetal T(4) and T(3) levels were diminished following maternal MeI exposure compared to baseline values. Fetal TSH was significantly increased following 4 days of maternal MeI exposure. MeI-induced changes in the fetal thyroid included reduced colloid formation, epithelial follicular hypertrophy, and epithelial cytoplasmic vacuolation. Time-course investigations using 20 ppm MeI revealed highly concentrated levels of iodide in fetal versus maternal serum. Direct maternal administration of sodium iodide by intravenous infusion during GD 23-26 induced similar effects on fetal thyroid structure and function as MeI, identifying iodide as the putative agent. Elevated S-methylcysteine adduct concentrations were noted in fetal hemoglobin, indicating that some unreacted MeI may be delivered directly to the fetus. However, the weight of evidence from these studies suggests that late-stage fetal death following maternal exposure to MeI during GD 23-26 is the result of preferential accumulation of iodide in the fetal compartment causing disruption of the fetal hypothalamic-pituitary-thyroid axis at a critical time in the development of the rabbit fetal thyroid.