Rho-associated kinase (ROCK), including the ROCK-I and ROCK-II isoforms, is a protein kinase involved in signaling from Rho to actin cytoskeleton. However, in vivo functions of each ROCK isoform remain largely unknown. We generated mice deficient in ROCK-II by gene targeting. ROCK-II^−/− embryos were found at the expected Mendelian frequency until 13.5 days postcoitum, but approximately 90% died thereafter in utero. ROCK-II^−/− mice of both genders that survived were born runts, subsequently developed without gross abnormality, and were fertile. Whole-mount staining for a knocked-in lacZ reporter gene revealed that ROCK-II was highly expressed in the labyrinth layer of the placenta. Disruption of architecture and extensive thrombus formation were found in the labyrinth layer of ROCK-II^−/− mice. While no obvious alteration in actin filament structures was found in the labyrinth layer of ROCK-II^−/− placenta and stress fibers were formed in cultured ROCK-II^−/− trophoblasts, elevated expression of plasminogen activator inhibitor 1 was found in ROCK-II^−/− placenta. These results suggest that ROCK-II is essential in inhibiting blood coagulation and maintaining blood flow in the endothelium-free labyrinth layer and that loss of ROCK-II leads to thrombus formation, placental dysfunction, intrauterine growth retardation, and fetal death.