CG is a human placental glycoprotein expressed in first-trimester trophoblasts. To examine the regulation of the CGbeta-subunit in an in vivo model, we previously constructed transgenic mice containing the CGbeta gene cluster and demonstrated its expression in the placenta. Here, we determine the cell type responsible for CGbeta synthesis in the mouse by immunohistochemical and in situ hybridization analyses. Unexpectedly, the protein and messenger RNA were not detected in trophoblast or elsewhere in the chorioallantoic placenta but in the parietal endoderm, a separate extraembryonic component of the placenta. The identity of this CGbeta-producing layer was confirmed by the presence of laminin A, a known protein of the parietal endoderm extracellular matrix. However, we observed heterogeneity, with respect to synthesis of laminin A and CGbeta; parietal endoderm cells expressing CGbeta at high levels synthesized less laminin A, and vice versa. The absence of CGbeta production in trophoblasts of the transgenic mouse demonstrates a lack of transcriptional equivalence between rodent and human trophoblasts. The data are consistent with the hypothesis that, in human placenta, one or more transcriptional factors coevolved as members of the CGbeta gene cluster underwent duplication.