VCAM-1 is a cytokine-inducible cell surface protein capable of mediating adhesion to leukocytes expressing alpha 4 integrins. Mice deficient in VCAM-1 expression were produced by targeted homologous recombination in ES cells. VCAM-1-deficient embryos were not viable and exhibited either of two distinct phenotypes. Approximately half of the embryos died before embryonic day 11.5 and exhibited a severe defect in placental development in which the allantois failed to fuse with the chorion. The remaining VCAM-1-deficient embryos survived to embryonic day 11.5-12.5 and displayed several abnormalities in their developing hearts including a reduction of the compact layer of the ventricular myocardium and intraventricular septum. The hearts also contained significant amounts of blood in the pericardial space and lacked an epicardium. alpha 4 and VCAM-1 were found to be expressed in wild-type embryos in a reciprocal fashion in the chorion and allantois and in the epicardium and the underlying myocardium, although VCAM-1 was expressed in the intraventricular septum in the absence of adjacent alpha 4-expressing cells. These data suggest important roles for VCAM-1 and alpha 4 in the development of the placenta and the heart.