The multinucleated syncytial trophoblast, which forms the outermost layer of the placenta and serves multiple functions, is differentiated from and maintained by cytotrophoblast cell fusion. Deficiencies in syncytial trophoblast differentiation or maintenance likely contribute to intrauterine growth restriction and pre-eclampsia, two common gestational diseases. The cellular and molecular mechanisms governing trophoblast syncytialization are poorly understood. We report here that the proprotein convertase furin is highly expressed in syncytial trophoblast in the first trimester human placentas, and expression of furin in the syncytiotrophoblast is significantly lower in the placentas from pre-eclamptic patients as compared with their gestational age-matched control placentas. Using multiple experimental models including induced fusion of choriocarcinoma BeWo cells and spontaneous fusion of primary cultured cytotrophoblast cells or placental explants, we demonstrate that cytotrophoblast cell fusion and syncytialization are accompanied by furin expression. Furin-specific siRNAs or inhibitors inhibit cell fusion in BeWo cells, as well as trophoblast syncytialization in human placental explants. Furthermore, type 1 IGF receptor (IGF1R) is indicated in this study as a substrate of furin, and processing of IGF1R by furin is an essential mechanism for syncytialization. Finally, using lentivirus-mediated RNAi targeting to mouse trophectoderm, we demonstrate that furin function is required for the development of syncytiotrophoblast structure in the labyrinth layer, as well as for normal embryonic development.