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In utero exposure to nicotine is associated with increased risk of numerous adverse fetal and neonatal outcomes, which suggests that it acts directly to affect placental development and the establishment of the fetomaternal circulation (FC). This study used both in vivo [Wistar rats treated with 1 mg/kg nicotine from 2 wk prior to mating until gestational day (GD) 15] and in vitro (RCHO-1 cell line; treated with 10-9 to 10-3M nicotine) models to examine the effects of nicotine on these pathways. At GD 15, control and treated placentas were examined for the impact of nicotine on 1) trophoblast invasion, proliferation, and degree of hypoxia, 2) labyrinth vascularization, 3) expression of key genes of placental development, and 4) expression of placental angiogenic factors. The RCHO-1 cell line was used to determine the direct effects of nicotine on trophoblast differentiation. Our in vivo experiments show that nicotine inhibits trophoblast interstitial invasion, increases placental hypoxia, downregulates labyrinth vascularization as well as key transcription factors Hand1 and GCM1, and decreases local and circulating EG-VEGF, a key placental angiogenic factor. The in vitro experiments confirmed the inhibitory effects of nicotine on the trophoblast migration, invasion, and differentiation processes and demonstrated that those effects are most likely due to a dysregulation in the expression of nicotine receptors and a decrease in MMP9 activity. Taken together, these data suggest that adverse effects of maternal smoking on pregnancy outcome are due in part to direct and endocrine effects of nicotine on the main processes of placental development and establishment of FC. [ABSTRACT FROM AUTHOR]