Lack of JunB, an immediate early gene product and member of the AP‐1 transcription factor family causes embryonic lethality between E8. 5 and E10. 0. Although mutant embryos are severely retarded in growth and development, cellular proliferation is apparently not impaired. Retardation and embryonic death are caused by the inability of JunB‐deficient embryos to establish proper vascular interactions with the maternal circulation due to multiple defects in extra‐embryonic tissues. The onset of the phenotypic defects correlates well with high expression of junB in wild‐type extra‐embryonic tissues. In trophoblasts, the lack of JunB causes a deregulation of proliferin, matrix metalloproteinase‐9 (MMP‐9) and urokinase plasminogen activator (uPA) gene expression, resulting in a defective neovascularization of the decidua. As a result of downregulation of the VEGF‐receptor 1 (flt‐1), blood vessels in the yolk sac mesoderm appeared dilated. Mutant embryos which escape these initial defects finally die from a non‐vascularized placental labyrinth. Injection of junB−/− embryonic stem (ES) cells into tetraploid wild‐type blastocysts resulted in a partial rescue, in which the ES cell‐derived fetuses were no longer growth retarded and displayed a normal placental labyrinth. Therefore, JunB appears to be involved in multiple signaling pathways regulating genes involved in the establishment of a proper feto‐maternal circulatory system.