Angiogenesis is essential for normal mammalian development and is controlled by the local balance of pro- and antiangiogenic factors. Here we describe a novel mouse cDNA sequence encoding sFLT-1 that is a potent antagonist to vascular endothelial growth factor (VEGF) and show for the first time its in vivo production. In situ hybridization and Northern blot analysis with probes specific for sFLT-1 or FLT-1 showed that the relative abundance of their mRNAs changed markedly in spongiotrophoblast cells in the placenta as gestation progressed. On day 11 of pregnancy, sFLT-1 mRNA was undetectable but FLT-1 readily apparent, and by day 17 sFLT-1 mRNA was abundant but FLT-1 barely detectable. sFLT-1 was identified in conditioned medium of cultured placenta from day 17 pregnant mice and likely to be present in the circulation, as there is a substantial increase of VEGF-binding activity in the serum from day 13 of pregnancy, which coincides with the abundant sFLT-1 expression in placenta. Expression of sFLT-1 was also observed in adult lung, kidney, liver, and uterus. These data suggest a novel mechanism of regulation of angiogenesis by alternative splicing of FLT-1 pre-mRNA. Treatment of pregnant mice with exogenous VEGF from day 9 to 17 of pregnancy, which alters the ratio of VEGF to sFLT-1, resulted in an increase in the number of resorption sites and fibrin deposition in the placenta of ongoing pregnancies. These findings have important implications for understanding placental function and may be relevant in a range of disease states.