Classical endocrine studies have shown that steroid hormones are required for the maintenance of pregnancy and placental viability. The oestrogen-receptor-related receptor beta (ERR-beta) is an orphan member of the superfamily of nuclear hormone receptors. Although ERR-beta is homologous to the oestrogen receptor and binds the oestrogen response element, it is not activated by oestrogens. Expression of ERR-beta during embryogenesis defines a subset of extra-embryonic ectoderm that subsequently forms the dome of the chorion, suggesting that ERR-beta may be involved in early placental development. Homozygous mutant embryos generated by targeted disruption of the Estrrb gene have severely impaired placental formation, and die at 10.5 days post-coitum. The mutants display abnormal chorion development associated with an overabundance of trophoblast giant cells and a severe deficiency of diploid trophoblast. The phenotype can be rescued by aggregation of Estrrb mutant embryos with tetraploid wild-type cells, which contribute exclusively to extra-embryonic tissues. Our results indicate that ERR-beta has an important role in early placentation, and suggest that an inductive signal originating from or modified by the chorion is required for normal trophoblast proliferation and differentiation.