Protein kinase B alpha (PKB alpha/Akt1) is implicated in the regulation of metabolism, transcription, cell survival, angiogenesis, cell migration, growth, and tumorigenesis. Previously, it was reported that PKB alpha-deficient mice are small with increased neonatal mortality (Cho, H., Thorvaldsen, J. L., Chu, Q., Feng, F., and Birnbaum, M. J. (2001) J. Biol. Chem. 276, 38349-38352 and Chen, W. S., Xu, P. Z., Gottlob, K., Chen, M. L., Sokol, K., Shiyanova, T., Roninson, I., Wenig, W., Suzuki, R., Tobe, K., Kadowaki, T., and Hay, N. (2001) Genes Dev. 15, 2203-2208). Here we show that PKB alpha is widely expressed in placenta including all types of trophoblast and vascular endothelial cells. Pkb alpha-/- placentae display significant hypotrophy, with marked reduction of the decidual basalis and nearly complete loss of glycogen-containing cells in the spongiotrophoblast, and exhibit decreased vascularization. Pkb alpha-/- placentae also show significant reduction of phosphorylation of PKB and endothelial nitric-oxide synthase. These defects may cause placental insufficiency, fetal growth impairment, and neonatal mortality. These data represent the first evidence for the role of PKB alpha and endothelial nitricoxide synthase in regulating placental development and provide an animal model for intrauterine growth retardation.