Wnt genes have been implicated in a range of developmental processes in the mouse including the patterning of the central nervous system and limbs. Reported here for the first time is the expression of Wnt2 in the early heart field of 7.5–8.5 dpc (days post-coitum) mouse embryos, making Wnt2 a potentially useful gene marker for the early stages of heart development. Expression was also detected in the allantois from 8.0 dpc and at later stages in the placenta and umbilicus. Mice deficient in Wnt2, generated by gene targeting, displayed runting and approximately 50% died perinatally. Histological analysis revealed alterations in the size and structure of placentas from these mice from 14.5 dpc. The placental defects were associated primarily with the labyrinthine zone and included oedema and tissue disruption and accumulation of maternal blood in large pools. There was also an apparent decrease in the number of foetal capillaries and an increase in the amount of fibrinoid material in the Wnt2 mutant placentas. These results suggest that Wnt2 is required for the proper vascularisation of the mouse placenta and the placental defects in Wnt2-deficient mice result in a reduction in birthweight and perinatal lethality.