Endosperm and embryo development are coordinated via epigenetic regulation and signaling between these tissues. In maize (Zea mays), the endosperm-embryo signals are not known, but endosperm cellularization is a key event for embryos to form shoots and roots. We screened seed mutants for nonautonomous functions in endosperm and embryo development with genetically nonconcordant seeds and identified the recessive mutant rough endosperm3 (rgh3). The wild-type Rgh3 allele is required in the endosperm for embryos to develop and has an autonomous role in embryo and seedling development. Endosperm cell differentiation is defective in rgh3. Results from endosperm cell culture indicate that rgh3 mutants remain in a proliferative state through mid-seed development. Rgh3 encodes the maize U2AF(35) Related Protein (URP), an RNA splicing factor involved in both U2 and U12 splicing. The Rgh3 allele produces at least 19 alternative splice variants with only one isoform encoding a full-length ortholog to URP. The full-length RGH3α isoform localizes to the nucleolus and displays a speckled pattern within the nucleoplasm, and RGH3α colocalizes with U2AF(65). A survey of alternatively spliced transcripts found that, in the rgh3 mutant, a fraction of noncanonical splicing events are altered. Our findings suggest that differentiation of maize endosperm cell types is necessary for embryos to develop. The molecular cloning of Rgh3 suggests that alternative RNA splicing is needed for cell differentiation, development, and plant viability.