High twin-lamb mortality is a significant issue for Merino sheep, as their poor lamb raising ability leads to starvation-mismothering of lambs. Progesterone (P4) is involved in the expression of maternal behaviours yet has a sedative impact on lambs. We investigated the relationship between circulating P4 in pregnant ewes and neonatal lambs and maternal behaviour and lamb survival. Plasma P4 was measured in samples collected from 56 multiparous, indoor housed twin-bearing ewes on day 80, 100, 120 and 140 of pregnancy, and from their lambs 4 and 24 hr post-partum (pp). Retrospective behaviours were analysed using saved infrared CCTV footage, and lamb survival was recorded through to weaning. Pearson’s correlation was used to analyse behaviour and P4. P4 levels were categorised into four levels (Low, L.Med, H.Med, High) for the Chi2 analysis on lamb survival to weaning. Significance was set at P ≤ 0.05. Ewes with high P4 displayed fewer negative behaviours overall, specifically towards their second-born lamb (R = -0.99; P = 0.001), without showing preference towards their first (R = -0.97; P = 0.006). Ewe P4 was strongly correlated (P > 0.001) to lamb P4 at both 4 (R = 0.73) and 24 hr (R = 0.79) pp. For the second-, but not the first-, lamb P4 levels were positively correlated to increased latency to stand and suck after birth (P > 0.05), and fewer lambs within the High P4 group survived to day 7 pp (P < 0.001) compared to the other P4 levels. Our findings demonstrate a strong correlation between ewe and lamb P4, and while higher ewe P4 may be linked to positive ewe behaviours, high P4 in lambs negatively impacts their survival. This information may be used to identify high risk ewes prior to parturition to help reduce lamb mortality in Merino sheep.