TLE3 is a transcriptional co-repressor that interacts with several DNA-binding repressors, including downstream effectors of the Notch signaling pathway. We generated Tle3-deficient mice and found that they die in utero and their death is associated with abnormal development of the placenta with major defects in the maternal vasculature. In the normal placenta, maternal blood spaces are lined, not as usual in the mammalian circulation by endothelial cells, but rather by specialized embryo-derived cells of the trophoblast cell lineage named trophoblast giant cells (TGC). Tle3 mRNA is expressed in those specialized TGC and Tle3 mutants show severe defects in differentiation of TGC-lined channels and lacunar spaces that take blood out of the labyrinth zone of the placenta and into the uterine veins. The mutants also show somewhat milder defects on the arterial-side of the maternal vascular circuit in spiral arteries and canals that take blood into the labyrinth. Notch2 and Tle3 expression patterns overlap in several TGC subtypes and we found that Tle3 and Notch2 mutants have some overlapping features. However, they also show differences implying that TLE3 may mediate some but not all of the effects of Notch2 signaling during placenta development. Therefore, formation of the different types of maternal blood spaces by different TGC subtypes is regulated by distinct molecular mechanisms.