Maspin (Mp) is a member of the serpin family with inhibitory functions against cell migration, metastasis and angiogenesis. To identify its role in embryonic development in vivo, we generated maspin knockout mice by gene targeting. In this study, we showed that homozygous loss of maspin expression was lethal at the peri-implantation stage. Maspin was specifically expressed in the visceral endoderm after implantation; deletion of maspin interfered with the formation of the endodermal cell layer, thereby disrupting the morphogenesis of the epiblast. In vitro, the ICM of the Mp(-/-) blastocysts failed to grow out appropriately. Data from embryoid body formation studies indicated that the Mp(-/-) EBs had a disorganized, endodermal cell mass and lacked a basement membrane layer. We showed that the embryonic ectoderm lineage was lost in the Mp(-/-) EBs, compared with that of the Mp(+/+) EBs. Re-expression of maspin partially rescued the defects observed in the Mp(-/-) EBs, as evidenced by the appearance of ectoderm cells and a layer of endoderm cells surrounding the ectoderm. In addition, a maspin antibody specifically blocked normal EB formation, indicating that maspin controls the process through a cell surface event. Furthermore, we showed that maspin directly increased endodermal cell adhesion to laminin matrix but not to fibronectin. Mp(+/-) endodermal cells grew significantly slower than Mp(+/+) endodermal cells on laminin substrate. We conclude that deletion of maspin affects VE function by reducing cell proliferation and adhesion, thereby controlling early embryonic development.