HEPATOCYTE growth factor/scatter factor (HGF/SF) functions as a mitogen, motogen and morphogen for a variety of cultured cells^1–7. The genes for HGF/SF and its receptor (the c-met protooncogene product⁸) are expressed in many tissues during the embryonic periods and in the adult^9–14. HGF/SF is thought to mediate a signal exchange between the mesenchyme and epithelia during mouse development¹⁵. To examine the physiological role of HGF/SF, we generated mutant mice with a targeted disruption of the HGF/SF gene. Here we report that homozygous mutant embryos have severely impaired placentas with markedly reduced numbers of labyrinthine trophoblast cells, and die before birth. The growth of trophoblast cells was stimulated by HGF/SF in vitro, and the HGF/SF activity was released by allantois in primary culture of normal but not mutant embryos. These findings suggest that HGF/SF is an essential mediator of allantoic mesenchyme-trophoblastic epithelia interaction required for placental organogenesis.