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Congenital heart defects (CHD) affect approximately 1% of all live births, and often require complex surgeries at birth. We have previously demonstrated abnormal placental vascularization in human placentas from fetuses diagnosed with CHD. <i>Hand1</i> has roles in both heart and placental development and is implicated in CHD development. We utilized two conditionally activated <i>Hand1^A126fs/+</i> murine mutant models to investigate the importance of cell-specific <i>Hand1</i> on placental development in early (<i>Nkx2-5^Cre</i>) and late (<i>Cdh5^Cre</i>) pregnancy. Embryonic lethality occurred in <i>Nkx2-5^Cre/Hand1^A126fs/+</i> embryos with marked fetal demise occurring after E10.5 due to a failure in placental labyrinth formation and therefore the inability to switch to hemotrophic nutrition or maintain sufficient oxygen transfer to the fetus. Labyrinthine vessels failed to develop appropriately and vessel density was significantly lower by day E12.5. In late pregnancy, the occurrence of <i>Cdh5^Cre+;Hand1^A126fs/+</i> fetuses was reduced from 29% at E12.5 to 20% at E18.5 and remaining fetuses exhibited reduced fetal and placental weights, labyrinth vessel density and placenta angiogenic factor mRNA expression. Our results demonstrate for the first time the necessity of <i>Hand1</i> in both establishment and remodeling of the exchange area beyond early pregnancy and in patterning vascularization of the placental labyrinth crucial for maintaining pregnancy and successful fetal growth.