Formation of extraembryonic tissues, and in particular the placenta, is an absolute necessity to ensure growth and survival of the embryo during intrauterine development in mammals. To date, an intriguing number of genes have been identified that are essential for development of extraembryonic structures. However, the underlying genetic information must be interpreted by a set of epigenetic instructions to both establish and maintain lineage- and cell type-specific expression profiles. Based on accumulating data in particular from studies in the mouse, this article is aimed at highlighting the epigenetic machinery required for differentiation of extraembryonic cell types and formation of the placenta. An overview of knockout models reveals key stages in extraembryonic development that are particularly sensitive to alterations in the chromatin environment. The article also summarizes the importance of complex epigenetically controlled mechanisms for placental development, such as imprinted gene expression and imprinted X chromosome inactivation. These investigations of the epigenetic regulation of transcriptional states will provide valuable insights into the dynamic chromatin environment that is specific to extraembryonic tissues and determines gene expression patterns required for normal trophoblast differentiation.