X-box binding protein-1 (XBP-1) is an important regulator of a subset of genes during endoplasmic reticulum (ER) stress. In the current study, we analyzed endogenous XBP-1 expression and localization, with a view to determining the effects of ER stress on the developmental competency of preimplantation embryos in mice. Fluorescence staining revealed that functional XBP-1 is localized on mature oocyte spindles and abundant in the nucleus at the germinal vesicle (GV) stage. However, in preimplantation embryos, XBP-1 was solely detected in the cytoplasm at the one-cell stage. The density of XBP-1 was higher in the nucleus than the cytoplasm at the two-cell, four-cell, eight-cell, morula, and blastocyst stages. Furthermore, RT-PCR analysis confirmed active XBP-1 mRNA splicing at all preimplantation embryo stages, except the one-cell stage. Tunicamycin (TM), an ER stress inducer used as a positive control, promoted an increase in the density of nuclear XBP-1 at the one-cell and two-cell stages. Similarly, culture medium supplemented with 25 mM sorbitol displayed a remarkable increase active XBP-1 expression in the nuclei of 1-cell and 2-cell embryos. Conversely, high concentrations of TM or sorbitol led to reduced nuclear XBP-1 density and significant ER stress-induced apoptosis. Tauroursodeoxycholic acid (TUDCA), a known inhibitor of ER stress, improved the rate of two-cell embryo development to blastocysts by attenuating the expression of active XBP-1 protein in the nucleus at the two-cell stage. Our data collectively suggest that endogenous XBP-1 plays a role in normal preimplantation embryonic development. Moreover, XBP-1 splicing is activated to generate a functional form in mouse preimplantation embryos during culture stress. TUDCA inhibits hyperosmolar-induced ER stress as well as ER stress-induced apoptosis during mouse preimplantation embryo development.