Implantation and growth of the placenta requires extensive angiogenesis to establish the vascular structures involved in exchange. Failure to establish adequate blood supply to the fetus may have serious clinical consequences such as intrauterine growth retardation. Vascular endothelial cell growth factor (VEGF) is a recently identified growth factor with significant angiogenic properties. We have demonstrated the presence of four species of mRNA encoding VEGF in both first trimester and term placenta. In situ hybridization was used to localize the sites of expression of VEGF mRNA in these tissues. VEGF expression was seen in villous trophoblast in the first trimester and in extravillous trophoblast at term, and in both fetal macrophages within the villi and maternal macrophages in the decidua. Glandular epithelium in maternal decidua also expressed VEGF mRNA. The strongest site of expression was in maternal macrophages adjacent to Nitabuch's stria, a zone of necrosis at the site of implantation. This complex pattern of expression suggests that VEGF is involved in angiogenesis on both maternal and fetal sides of the placenta and that macrophages are the primary source of VEGF. However, VEGF may also play a role in term placenta, when extensive angiogenesis has diminished, possibly regulating vascular permeability.