Placental villous development requires the co-ordinated action of angiogenic factors on both endothelial and trophoblast cells. Like vascular endothelial growth factor (VEGF), VEGF-C increases vascular permeability, stimulates endothelial cell proliferation and migration. In the present study, we investigated the expression of VEGF-C and its receptors VEGFR-3 and VEGFR-2 in normal and intrauterine growth-restricted (IUGR) placenta. Immunolocalisation studies showed that like VEGF and VEGFR-1, VEGF-C, VEGFR-3 and VEGFR-2 co-localised to the syncytiotrophoblast, to cells in the maternal decidua, as well as to the endothelium of the large placental blood vessels. Western blot analysis demonstrated a significant decrease in placental VEGF-C and VEGFR-3 protein expression in severe IUGR as compared to gestationally-matched third trimester pregnancies. Conditioned medium from VEGF-C producing pancreatic carcinoma (Suit-2) and endometrial epithelial (Hec-1B) cell lines caused an increased association of the phosphorylated extracellular signal regulated kinase (ERK) in VEGFR-3 immunoprecipitates from spontaneously transformed first trimester trophoblast cells. VEGF121 caused dose-dependant phosphorylation of VEGFR-2 in trophoblast cells as well as stimulating DNA synthesis. In addition, premixing VEGF165 with heparin sulphate proteoglycan potentiated trophoblast proliferation and the association of phospho-ERK with the VEGFR-2 receptor. VEGF165-mediated DNA synthesis was inhibited by anti-VEGFR-2 neutralising antibody. The results demonstrate functional VEGFR-2 and VEGFR-3 receptors on trophoblast and suggest that the decreased expression of VEGF-C and VEGFR-3 may contribute to the abnormal villous development observed in IUGR placenta.