Blastocyst formation rates during horse embryo in vitro production (IVP) are disappointing, and embryos that blastulate in culture fail to produce the characteristic and vital glycoprotein capsule. The aim of this study was to evaluate the impact of IVP on horse embryo development and capsule formation. IVP embryos were produced by intracytoplasmic sperm injection of in vitro matured oocytes and either culture in synthetic oviduct fluid (SOF) or temporary transfer to the oviduct of a ewe. Control embryos were flushed from the uterus of mares 6-9 days after ovulation. Embryo morphology was evaluated with light microscopy, and multiphoton scanning confocal microscopy was used to examine the distribution of microfilaments (AlexaFluor-Phalloidin stained) and the rate of apoptosis (cells with fragmented or terminal deoxynucleotidyl transferase-mediated dUTP nick end-labeling-positive nuclei). To examine the influence of culture on capsule formation, conceptuses were stained with a monoclonal antibody specific for capsular glycoproteins (OC-1). The blastocyst rate was higher for zygotes transferred to a sheep's oviduct (16%) than for those cultured in SOF (6.3%). Day 7 IVP embryos were small and compact with relatively few cells, little or no blastocoele, and an indistinct inner cell mass. IVP embryos had high percentages of apoptotic cells (10% versus 0.3% for in vivo embryos) and irregularly distributed microfilaments. Although they secreted capsular glycoproteins, the latter did not form a normal capsule but instead permeated into the zona pellucida or remained in patches on the trophectodermal surface. These results demonstrate that the initial layer of capsule is composed of OC-1-reactive glycoproteins and that embryo development ex vivo is retarded and aberrant, with capsule formation failing as a result of failed glycoprotein aggregation.