The mammalian placenta is the site of exchange of nutrients and waste between mother and embryo. In humans, placental insufficiency can result in intrauterine growth retardation, perinatal death and spontaneous abortion. We show that in C57BL/6J mice a null mutation in the gene encoding the transcriptional corepressor, Tgif, causes placental defects. The major defects are decreased vascularization of the placenta, due to a decrease in the fetal blood vessels, and decreased expression of the gap junction protein Gjb2 (Cx26). These defects result in severe growth retardation in a proportion of Tgif null embryos in Tgif heterozygous mothers, and an overall growth delay in Tgif null animals. Placental defects are much more severe if the mother also completely lacks Tgif function, and placentas from heterozygous Tgif embryos are defective in a Tgif null mother. Embryo transfer experiments show that even the placenta from a wild type embryo is compromised in the absence of maternal Tgif. These results demonstrate that Tgif functions in the normal development of the placenta, and suggest a role for maternal factors in regulating the morphogenesis of embryonically-derived placental tissues.