Cited2 is widely expressed in the developing embryo and in extraembryonic tissues including the placenta. Gene expression can be induced by a number of factors; most notably by the hypoxia inducible transcription factor, HIF1, under low oxygen conditions. Cited2 encodes for a transcriptional co-factor that in vitro can act as both a positive and negative regulator of transcription. This function is due to its interaction with CBP/p300 and appears to depend on whether Cited2 enables CBP/p300 to interact with the basic transcriptional machinery, or if its binding prevents such an interaction from occurring. Here, we report a novel function for Cited2 in placenta formation, following gene deletion in mouse. In the absence of Cited2 the placenta and embryo are significantly small from 12.5 and 14.5 dpc respectively, and death occurs in utero. Cited2 null placentas have fewer differentiated trophoblast cell types; specifically there is a reduction in trophoblast giant cells, spongiotrophoblasts and glycogen cells. In addition, the fetal vasculature of the placenta is disorganised and there are fewer anastomosing capillaries. Given that Cited2 is expressed in both trophoblasts and the fetal vasculature, the observed defects fit well with the sites of gene expression. We conclude that Cited2 is required for normal placental development and vascularisation, and hence for embryo viability.