The transition from fetal to postnatal life involves clearance of liquid from the lung and airways, and rapid formation of a functional residual capacity. Despite the importance of the diaphragm in this process, the impact of birth on the mechanical and functional activity of its muscle fibers is not known. This study determined the contractile characteristics of individual "skinned" diaphragm fibers from 70 days (0.47) gestation to after birth in sheep. Based on differential sensitivity to the divalent ions calcium (Ca2+) and strontium (Sr2+), all fibers in the fetal diaphragm were classified as "fast," whereas fibers from the adult sheep diaphragm exhibited a "hybrid" phenotype where both "fast" and "slow" characteristics were present within each single fiber. Transition to the hybrid phenotype occurred at birth, was evident after only 40 min of spontaneous breathing, and could be induced by simple mechanical stretch of diaphragm fibers from near-term fetuses (~147 days gestation). Both physical stretch of isolated fibers, and mechanical ventilation of the fetal diaphragm in situ, significantly increased sensitivity to Ca2+ and Sr2+, maximum force generating capacity, and decreased passive tension in near-term and preterm fetuses; however, only fibers from near-term fetuses showed a complete transition to a "hybrid" activation profile. These findings suggest that stretch associated with the transition from a liquid to air-filled lung at birth induces physical changes of proteins determining the activation and elastic properties of the diaphragm. These changes may allow the diaphragm to meet the increased mechanical demands of breathing immediately after birth.