In twin pregnancies where a common placenta is shared by both of the unborn babies (known as 'monochorionic' twins), blood vessels within the shared placenta form a connection between the developing babies. The connections allow blood to flow to and from each baby, but usually these connections balance each other out and cause no ill effect.

In TTTS, however, the blood begins to flow through these connections in an unbalanced manner. Essentially blood from the "donor" twin is transfused through the connections within the placenta into the "recipient" twin. The fetuses themselves are normal; the abnormality is confined to the placenta.

The recipient twin becomes overloaded by the extra blood flowing into its circulation. This twin's heart has to work harder to pump the extra blood around, which can result in heart failure. Heart failure can cause the twin to develop hydrops (retained fluid within its body). The recipient also produces too much urine which results in a build up of amniotic fluid within its amniotic sac. This is called polyhydramnios. This excess fluid causes enlargement of the uterus and can be extremely uncomfortable for the mother. It can also bring about an early delivery due to pressure on the cervix and ruptured membranes, and by directly stretching and stimulating the uterine muscles to contract.

The donor twin becomes anaemic due to the loss of some of its blood to the co-twin. If the degree of anaemia becomes severe enough to result in inadequate oxygen supply to the donor twin's organs, these organs can be damaged. The donor twin's kidneys may stop producing urine to conserve fluid. This will result in decreased amniotic fluid within this twin's amniotic sac. This is termed oligohydramnios. The sac around the developing baby's body can become very small causing the baby to appear to be almost shrink-wrapped and "stuck" up against the wall of the uterus.

If left untreated severe TTTS has a mortality rate of over 80% and can also cause handicap in survivors. If one fetus dies the remaining twin is at risk of dying within days, and if it survives it is at risk of brain damage.