The placental syncytiotrophoblast (ST) is a terminally differentiated epithelial cell monolayer that constitutes the outermost boundary between fetal and maternal tissues and performs a variety of synthetic, secretory, and transport functions essential for the maintenance of pregnancy. Although it is known that the ST arises from the underlying germinal layer of mononuclear cytotrophoblasts (Langhans' cells) by a process of cell fusion, the molecular mechanisms involved in this process are unclear. In order to address this question, we have investigated the effects of macrophage colony-stimulating factor (CSF-1) and granulocyte-macrophage colony-stimulating factor (GM-CSF), lymphohemopoietic cytokines implicated in mammalian placental development, on the in vitro morphological and functional differentiation of human trophoblast. Both CSF-1 and GM-CSF stimulated cytotrophoblast aggregation into large multinucleated structures composed of extensive patches of syncytium interspersed with mononuclear cells. Concomitant with this morphological differentiation was upregulation of the production of the placental hormones placental lactogen and chorionic gonadotrophin. Placental fibroblasts derived from the villous stroma that underlies the trophoblastic epithelium were found to produce both GMCSF and CSF-1 under the control of the trophoblastderived cytokines IL-1 and TNFα. These observations suggest that a network of interrelated cytokines operates within the basal (fetal) aspects of the villous stroma where they arc situated to play a significant role in the morphological and functional development of the human placenta.