The Ggnbp2 null mutant embryos died in utero between Embryonic Days 13.5 to 15.5 with dysmorphic placentae, characterized by excessive nonvascular cell nests consisting of proliferative trophoblastic tissue and abundant trophoblast stem cells (TSCs) in the labyrinth. Lethality of Ggnbp2 null embryos was caused by insufficient placental perfusion as a result of remarkable decreases in both fetal and maternal blood vessels in the labyrinth. These defects were accompanied by a significant elevation of c-Met expression and phosphorylation and its downstream effector Stat3 activation. Knockdown of Ggnbp2 in wild-type TSCs in vitro provoked the proliferation but delayed the differentiation with an upregulation of c-Met expression and an enhanced phosphorylation of c-Met and Stat3. In contrast, overexpression of Ggnbp2 in wild-type TSCs exhibited completely opposite effects compared to knockdown TSCs. These results suggest that loss of GGNBP2 in the placenta aberrantly overactivates c-Met-Stat3 signaling, alters TSC proliferation and differentiation, and ultimately compromises the structure of placental vascular labyrinth. Our studies for the first time demonstrate that GGNBP2 is an essential factor for pregnancy success acting through the maintenance of a balance of TSC proliferation and differentiation during placental development.