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T rophoblasts, the specialized cells of the placenta, play a major role in implantation and formation of the maternal-fetal interface. Through an unusual differentiation process examined in this review, these fetal cells acquire properties of leukocytes and endothelial cells that enable many of their specialized functions. In recent years a great deal has been learned about the regulatory mechanisms, from transcriptional networks to oxygen tension, which control trophoblast differentiation. The challenge is to turn this information into clinically useful tests for monitoring placental function and, hence, pregnancy outcome.