Chorioallantoic branching morphogenesis is a key milestone during placental development, creating the large surface area for nutrient and gas exchange, and is therefore critical for the success of term pregnancy. Several Wnt pathway molecules have been shown to regulate placental development. However, it remains largely unknown how Wnt-Frizzled (Fzd) signaling spatiotemporally interacts with other essential regulators, ensuring chorionic branching morphogenesis and angiogenesis during placental development. Employing global and trophoblast-specific Fzd5-null and Gcm1-deficient mouse models, combining trophoblast stem cell lines and tetraploid aggregation assay, we demonstrate here that an amplifying signaling loop between Gcm1 and Fzd5 is essential for normal initiation of branching in the chorionic plate. While Gcm1 upregulates Fzd5 specifically at sites where branching initiates in the basal chorion, this elevated Fzd5 expression via nuclear β-catenin signaling in turn maintains expression of Gcm1. Moreover, we show that Fzd5-mediated signaling induces the disassociation of cell junctions for branching initiation via downregulating ZO-1, claudin 4, and claudin 7 expressions in trophoblast cells at the base of the chorion. In addition, Fzd5-mediated signaling is also important for upregulation of Vegf expression in chorion trophoblast cells. Finally, we demonstrate that Fzd5-Gcm1 signaling cascade is operative during human trophoblast differentiation. These data indicate that Gcm1 and Fzd5 function in an evolutionary conserved positive feedback loop that regulates trophoblast differentiation and sites of chorionic branching morphogenesis.