Vascular cell adhesion molecule-1 (VCAM-1) is expressed on vascular endothelium in a variety of inflammatory conditions and mediates leukocyte recruitment from blood into tissues. In this study we report a novel role for VCAM-1 in the formation of the umbilical cord and placenta during development. The murine VCAM1 gene was disrupted by targeted homologous recombination, and a distinct phenotype was found in VCAM-1-deficient embryos. At 8.5 days of gestation, the allantois failed to fuse to the chorion, resulting in abnormal placental development and embryonic death within 1-3 days. In addition, a role for VCAM-1 in early placental formation after chorioallantoic fusion was observed. In a minority of VCAM-1-deficient embryos, the allantois was able to fuse with the chorion, but the allantoic mesoderm was abnormally distributed over the chorionic surface. A small number of VCAM-1-deficient embryos survived, presumably by circumventing the placentation defects. They became viable and fertile adult mice with lack of VCAM-1 expression, normal organs, and an elevated number of circulating blood mononuclear leukocytes.