EGFL7 is a secreted angiogenic factor produced by embryonic endothelial cells. To understand its role in placental development, we established a novel Egfl7 knockout mouse. The mutant mice have gross defects in chorioallantoic branching morphogenesis and placental vascular patterning. Microangiography and 3D imaging revealed patchy perfusion of Egfl7 placentas marked by impeded blood conductance through sites of narrowed vessels. Consistent with poor feto-placental perfusion, Egfl7 knockout resulted in reduced placental weight and fetal growth restriction. The placentas also showed abnormal fetal vessel patterning and over 50% reduction in fetal blood space. In vitro, placental endothelial cells were deficient in migration, cord formation and sprouting. Expression of genes involved in branching morphogenesis, Gcm1, Syna and Synb, and in patterning of the extracellular matrix, Mmrn1, were temporally dysregulated in the placentas. Egfl7 knockout did not affect expression of the microRNA embedded within intron 7. Collectively, these data reveal that Egfl7 is crucial for placental vascularization and embryonic growth, and may provide insight into etiological factors underlying placental pathologies associated with intrauterine growth restriction, which is a significant cause of infant morbidity and mortality.