A critical transition occurs near mid-gestation of mammalian pregnancy. Prior to this transition, low concentrations of oxygen (hypoxia) signaling through Hypoxia Inducible Factor (HIF) functions as a morphogen for the placenta and fetal organs. Subsequently, functional coupling of the placenta and fetal cardiovascular system for oxygen (O2) transport is required to support the continued growth and development of the fetus. Here we tested the hypothesis that Hif-1α is required in maternal cells for placental morphogenesis and function. We used Tamoxifen-inducible Cre-Lox to inactivate Hif-1α in maternal tissues at E8.5 (MATcKO), and used ODD-Luciferase as a reporter of hypoxia in placenta and fetal tissues. MATcKO of Hif-1α reduced the number of uterine natural killer (uNK) cells and Tpbpa-positve trophoblast cells in the maternal decidua at E13.5 −15.5. There were dynamic changes in all three layers of E13.5–15.5 MATcKO placenta. Of note was the under-development of the labyrinth at E15.5 associated with reduced Ki67 and increased TUNEL staining consistent with reduced cell proliferation and increased apoptosis. Labyrinth defects were particularly evident in placentas connected to effectively HIF-1α heterozygous null embryos. MATcKO had no effect on basal ODD-Luciferase activity in fetal organs (heart, liver, brain) at any stage, but at E13.5 −15.5 resulted in enhanced induction of the ODD-Luciferase hypoxia reporter when the dam’s inspired O2 was reduced to 8% for 4 hours. MATcKO also slowed the growth after E13.5 of fetuses that were effectively heterozygous for Hif-1α, with most being non-viable at E15.5. The hearts of these E15.5 fetuses were abnormal with reduction in size, thickened epicardium and mesenchymal septum. We conclude that maternal HIF-1α is required for placentation, specifically, recruitment of uNK and trophoblast cells into the maternal decidua and other trophoblast cell behaviors. The placental defects render the fetus vulnerable to O2 deprivation after mid-gestation.