The specific roles of classical cadherins at key morphogenetic events during development are still not fully understood. As part of a project to study cadherin function during early mammalian development, we generated mice carrying an HA‐epitope tagged Cdh1 (E‐cadherin) cDNA knocked into the Cdh1 locus, similar to the previously described mouse mutants in which we forced Cdh2 (N‐cadherin) expression in the Cdh1 expression domain. As expected and in contrast to Cdh1Cdh2/Cdh2 and Cdh1−/−, our Cdh1HA/HA mutant embryos form proper trophectoderm, implant and undergo both gastrulation and neurulation. However, Cdh1HA/HA mice display an unexpected phenotype at embryonic day 10.5. Cdh1HA/HA embryos are smaller, paler and suffer from an insufficient nutrient supply. We detected a reduced expression of Cdh1HA specifically in the extraembryonic ectoderm and in the labyrinth layer, whereas expression in the embryo proper was normal. With this approach, we show for the first time that Cdh1 is essential for the correct formation of the placenta. Placentas without Cdh1 expression are impaired and incapable of establishing a proper connection between the embryonic and the maternal blood vessels for efficient nutrient and oxygen transport. Developmental Dynamics 239:2330–2344, 2010. © 2010 Wiley‐Liss, Inc.