The placenta is a highly specialized organ whose primary function is to promote the exchange of nutrients and oxygen between maternal and fetal blood, essential for survival and growth of the baby. The surface area for nutrient transport is a highly convoluted villous structure that forms by branching morphogenesis. In mice, this process begins after embryonic day 8.5, following attachment of allantoic mesoderm to the chorion, and continues through the end of gestation. Gene targeting studies in mice have identified a large number of genes that are essential for chorioallantoic development to give rise to the layer of the placenta called the labyrinth. Collectively, these studies reveal that a number of signaling pathways regulate four distinct phases of labyrinth development: chorioallantoic attachment (involving VCAM1 and its receptor alpha4 integrin, Bmp5/7, and Wnt7b, as well as the cochaperone Mrj), initiation of branching (involving the Gcm1 transcription factor to select sites of branch initiation), extension of villous branching (involving FGF, EGF, and HGF/Met signaling, through the Grb2/Sos1/Mek1/p38alpha MAPK pathway), followed by vascularization of the villous tree. The restricted expression and/or action of the signaling components indicate that a series of intercellular interactions regulate chorioallantoic development.