A number of studies have shown that placental insufficiency affects embryonic patterning of the kidney and leads to a decreased number of functioning nephrons in adulthood; however, there is circumstantial evidence that placental insufficiency may also affect renal medullary growth, which could account for cases of unexplained renal medullary dysplasia and for abnormalities in renal function among infants who had experienced intrauterine growth retardation. We observed that mice with late gestational placental insufficiency associated with genetic loss of Cited1 expression in the placenta had renal medullary dysplasia. This was not caused by lower urinary tract obstruction or by defects in branching of the ureteric bud during early nephrogenesis but was associated with decreased tissue oxygenation and increased apoptosis in the expanding renal medulla. Loss of placental Cited1 was required for Cited1 mutants to develop renal dysplasia, and this was not dependent on alterations in embryonic Cited1 expression. Taken together, these findings suggest that renal medullary dysplasia in Cited1 mutant mice is a direct consequence of decreased tissue oxygenation resulting from placental insufficiency.