In humans, the circulatory system is different before and after birth. The fetal circulation is composed of the placenta, umbilical blood vessels encapsulated by the umbilical cord, heart and systemic blood vessels. A major difference between the fetal circulation and postnatal circulation is that the lungs are not used during the fetal stage resulting in the presence of shunts to move oxygenated blood and nutrients from the placenta to the fetal tissue. At birth, the start of breathing and the severance of the umbilical cord prompt various changes that quickly transform fetal circulation into postnatal circulation.

The placenta functions as the exchange site of nutrients and wastes between the maternal and fetal circulation. Water, glucose, amino acids, vitamins, and inorganic salts freely diffuse across the placenta along with oxygen. Two umbilical arteries carry systemic arterial blood from the fetus to the placenta where waste is exchanged for oxygen and nutrients. The oxygenated blood will then return to the fetus from the placenta via the umbilical vein.^{[citation needed]}

Hemoglobin is a structure found within the red blood cells that binds to and carries oxygen. Fetal hemoglobin enhances the fetus' ability to draw oxygen from the placenta. This is facilitated by the hemoglobin molecule that made up of two alpha and two gamma chains (2α2γ). Its oxygen-hemoglobin dissociation curve is shifted to the left, meaning that it is able to absorb oxygen at lower concentrations than adult hemoglobin. This enables fetal hemoglobin to absorb oxygen from adult hemoglobin in the placenta, where the oxygen pressure is lower than at the lungs. Around 6 months of age after birth, the gamma chains will gradually be replaced by beta chains. This new hemoglobin structure is known as hemoglobin A, composed of two alpha and two beta chains (2α2β). Hemoglobin A is the predominant form found in adults.^{[citation needed]}

Oxygenated blood from the placenta is carried to the fetus by the umbilical vein, which will drain into the inferior vena cava (IVC) through the ductus venosus or the liver. When oxygenated blood enters the IVC, it moves in parallel with deoxygenated blood from the fetal systemic veins, establishing a bilaminar blood flow as it enters the right atrium.

The fetal heart contains two upper atria and two lower ventricles. It also contains two additional structures, the foramen ovale and the ductus arteriosus, that function as shunts for oxygenated blood. The function of these shunts is to bypass the lungs and maintain proper circulation to important fetal tissue. In the fetal stage, the lungs fill with fluid and collapse because the fetus is within the amniotic sac and the placenta is providing the oxygen it needs to grow. With the lung collapsed, pulmonary vascular resistance remains high during the fetal stage to prevent blood flow into the lungs. As oxygenated blood arrives at the right atrium, the eustachian valve helps direct the oxygenated blood into the foramen ovale, an opening between the right and left atrium. As the blood flows through the left atrium, it will move through the mitral valve into the left ventricle and will be pumped through the aorta into the body. The shunting of oxygenated blood from right to left atrium will supply blood high in oxygen and nutrient content to the upper extremities, including the critically important brain. Some of the blood moves from the aorta through the internal iliac arteries to the umbilical arteries, and re-enters the placenta, where carbon dioxide and other waste products from the fetus are taken up and enter the maternal circulation.

Some of the blood entering the right atrium does not pass directly to the left atrium through the foramen ovale, but enters the right ventricle. This blood consists of oxygenated placental blood and deoxygenated blood returning from the fetal circulation. This blood is pumped into the pulmonary artery. At the pulmonary artery, it is met with high pulmonary vascular resistance as a result of collapsed lungs and pulmonary capillaries.  In the fetus, there is a special connection between the pulmonary artery and the aorta, called the ductus arteriosus. Because the aorta has lower pressure than the pulmonary artery, most of the blood flows across the ductus arteriosus away from the lungs. Once the blood goes through the ductus arteriosus, it mixes with the blood from the aorta. This results in mixed blood oxygen saturation that supplies most of the structures of the lower half of the fetal body.

As the umbilical vessels are obliterated and the infant starts breathing at birth, the source of oxygen changes from the placenta to the lungs. This major trigger will facilitate the transformation from fetal to postnatal circulation in many ways.^{[citation needed]}

First, the ductus venosus was previously kept open by the blood flow from the umbilical vein. The reduced blood flow through the umbilical vein at birth will collapse and close the ductus venosus.  Hence, the IVC will only carry deoxygenated blood from the infant's organs and lower extremities. Second, as the infant breathes, the lungs will expand and fill the alveoli with oxygen. The increased oxygen content will dilate the pulmonary capillaries and also trigger the release of nitric oxide, which further dilates the blood vessels within the lungs. Together, these forces will decrease the pulmonary vascular resistance.