The blastocyst consists of the outer layer of trophectoderm and pluripotent inner cell mass (ICM), the precursor of the placenta and fetus, respectively. During blastocyst expansion, the ICM adopts a compact, ovoidal shape, whose proper morphology is crucial for normal embryogenesis. Rho-associated kinase (ROCK), an effector of small GTPase RHO signaling, mediates the diverse cellular processes of morphogenesis, but its role in ICM morphogenesis is unclear. Here, we demonstrate that ROCK is required for cohesion of ICM cells and formation of segregated tissues called primitive endoderm (PrE) and epiblast (Epi) in the ICM of the mouse blastocyst. Blastocyst treatment with ROCK inhibitors Y-27632 and Fasudil caused widening or spreading of the ICM, and intermingling of PrE and Epi. Widening of ICM was independent of trophectoderm because isolated ICMs as well as colonies of mouse embryonic stem cells (mESC) also spread upon Y-27632 treatment. PrE, Epi, and trophectoderm cell numbers were similar between control and treated blastocysts, suggesting that ROCK inhibition affected ICM morphology but not lineage differentiation. Rock1 and Rock2 knockdown via RNA interference in mESC also induced spreading, supporting the conclusion that morphological defects caused by the pharmacological inhibitors were due to ROCK inactivation. When blastocysts were transferred into surrogates, implantation efficiencies were unaffected by ROCK inhibition, but treated blastocysts yielded greater fetal loss. These results show that proper ICM morphology is dependent on ROCK activity and is crucial for fetal development. Our studies have wider implication for improving efficiencies of human assisted reproductive technologies that diminish pregnancy loss and promote successful births.