LBP-1a and CP2 are ubiquitously expressed members of the grainyhead transcription factor family, sharing significant sequence homology, a common DNA binding motif, and modulating a range of key regulatory and structural genes. We have reported previously that CP2-null mice are viable with no obvious abnormality. LBP-1a provides redundant function in this contest. We show here that mice lacking LBP-1a expression develop intrauterine growth retardation at embryonic day 10.5, culminating in death 1 day later. No focal intraembryonic cause for this CP2-independent defect is evident. In contrast, a significant reduction in the thickness of the labyrinthine layer of the placenta is observed in LBP-1a-/- animals. However, expression of trophoblast differentiation markers is unperturbed in this context, and complementation studies utilizing tetraploid wild-type cells failed to rescue or ameliorate the LBP-1a-/- phenotype, excluding a primary trophoblast defect. An explanation for these observations is provided by the prominent angiogenic defect observed in the mutant placentas. LBP-1a-/- allantoic blood vessels fail to penetrate deeply and branch into the complex embryonic vasculature characteristic of the normal placenta. Interestingly, a similar defect in angiogenesis is observed in the yolk sac vasculature, primary endothelial cell-lined capillary tubes, although present, failed to connect into a characteristic intricate vascular network. Collectively, these results demonstrate that LBP-1a plays a critical role in the regulation of estraembryonic angiogenesis.