Water arrives in the mammalian gestation from the maternal circulation across the placenta. It then circulates between the fetal water compartments, including the fetal body compartments, the placenta and the amniotic fluid. Amniotic fluid is created by the flow of fluid from the fetal lung and bladder. A major pathway for amniotic fluid resorption is fetal swallowing; however in many cases the amounts of fluid produced and absorbed do not balance. A second resorption pathway, the intramembranous pathway (across the amnion to the fetal circulation), has been proposed to explain the maintenance of normal amniotic fluid volume. Amniotic fluid volume is thus a function both of the amount of water transferred to the gestation across the placental membrane, and the flux of water across the amnion. Membrane water flux is a function of the water permeability of the membrane; available data suggests that the amnion is the structure limiting intramembranous water flow. In the placenta, the syncytiotrophoblast is likely to be responsible for limiting water flow across the placenta. In human tissues, placental trophoblast membrane permeability increases with gestational age, suggesting a mechanism for the increased water flow necessary in late gestation. Membrane water flow can be driven by both hydrostatic and osmotic forces. Changes in both osmotic/oncotic and hydrostatic forces in the placenta my alter maternal-fetal water flow. A normal amniotic fluid volume is critical for normal fetal growth and development. The study of amniotic fluid volume regulation may yield important insights into the mechanisms used by the fetus to maintain water homeostasis. Knowledge of these mechanisms may allow novel treatments for amniotic fluid volume abnormalities with resultant improvement in clinical outcome.