Homeodomain-only protein/not expressed in choriocarcinoma clone 1 (HOP/NECC1) is a newly identified gene that modifies the expression of cardiac-specific genes and thereby regulates heart development. More recently, HOP/NECC1 was reported to be a suppressor of choriocarcinogenesis. Here, we examined the temporal expression profile of HOP/NECC1 in wild-type mouse placenta. We found that E8.5-E9.5 wild-type placenta expressed HOP/NECC1 in the giant cell and spongiotrophoblast layers. HOP/NECC1 (-/-) placenta exhibited marked propagation of giant cell layers and, in turn reduction of spongiotrophoblast formation. We demonstrated SRF transcriptional activity increased in the differentiating trophoblasts and forced expression of SRF in a trophoblast stem (TS) cell line induces the differentiation into giant cells. Negative regulation of SRF (serum response factor) by the binding of HOP/NECC1 protein contributed at least in part to the generation of these placental defects. Gradual induction of HOP/NECC1 in response to differentiation stimuli may result in the decision to differentiate into a particular type of trophoblastic cell lineage and result in non-lethal defects shown by the HOP/NECC1 (-/-) placentas.