Several imprinted genes have been implicated in the regulation of placental function and embryonic growth. On distal mouse chromosome 7, two clusters of imprinted genes, each regulated by its own imprinting center (IC), are separated by a poorly characterized region of 280kb (the IC1-IC2 interval). We previously generated a mouse line in which this IC1-IC2 interval has been deleted (Del(7AI) allele) and found that maternal inheritance of this allele results in low birth weights in newborns. Here we report that Del(7AI) causes a partial loss of Ascl2, a maternally expressed gene in the IC2 cluster, which when knocked out leads to embryonic lethality at midgestation due to a lack of spongiotrophoblast formation. The hypomorphic Ascl2 allele causes embryonic growth restriction and an associated placental phenotype characterized by a reduction in placental weight, reduced spongiotrophoblast population, absence of glycogen cells, and an expanded trophoblast giant cell layer. We also uncovered severe defects in the labyrinth layer of maternal mutants including increased production of the trilaminar labyrinth trophoblast cell types and a disorganized labyrinthine vasculature. Our results have important implications for our understanding of the role played by the spongiotrophoblast layer during placentation and show that regulation of the dosage of the imprinted gene Ascl2 can affect all three layers of the chorio-allantoic placenta.