Placental development is profoundly influenced by oxygen (O-2) tension. Hum
an cytotrophoblasts proliferate in vitro under low O-2 conditions but diffe
rentiate at higher O-2 levels, mimicking the developmental transition they
undergo as they invade the placental bed to establish the maternal-fetal ci
rculation in vivo. Hypoxia-inducible factor-1 (HIF-1), consisting of HIF-1
alpha and ARNT subunits, activates many genes involved in the cellular and
organismal response to O-2 deprivation. Analysis of Arnt(-/-) placentas rev
eals an aberrant cellular architecture due to altered cell fate determinati
on of Arnt(-/-) trophoblasts. Specifically, Arnt(-/-) placentas show greatl
y reduced labyrinthine and spongiotrophoblast layers, and increased numbers
of giant cells. We further show that hypoxia promotes the in vitro differe
ntiation of trophoblast stem cells into spongiotrophoblasts as opposed to g
iant cells. Our results clearly establish that O-2 levels regulate cell fat
e determination in vivo and that HIF is essential for mammalian placentatio
n. The unique placental phenotype of Arnt(-/-) animals also provides an imp
ortant tool for studying the disease of preeclampsia. Interestingly, aggreg
ation of Arnt(-/-) embryonic stem (ES) cells with tetraploid wild-type embr
yos rescues their placental defects; however, these embryos still die from
yolk sac vascular and cardiac defects.