Secreted Wnt proteins regulate many developmental processes in multicellular organisms. We have generated a targeted mutation in the mouse Wnt7b gene. Homozygous Wnt7b mutant mice die at midgestation stages as a result of placental abnormalities. Wnt7b expression in the chorion is required for fusion of the chorion and allantois during placental development. The α4 integrin protein, required for chorioallantoic fusion, is not expressed by cells in the mutant chorion. Wnt7b also is required for normal organization of cells in the chorionic plate. Thus, Wnt7b signaling is central to the early stages of placental development in mammals.