Tumor necrosis factor (TNF) is a protein hormone which mediates diverse inflammatory conditions, but which also may be involved in physiologic processes. To detect the expression of TNF as it might occur in normal tissues we developed a transgenic mouse line bearing a reporter gene construct in which the INF coding sequence and introns are replaced by a chloramphenicol acetyl transferase (CAT) coding sequence. In these animals, expression of CAT within tissues has been shown to reflect TNF production. We now report upon the pattern of CAT expression that is observed during normal pregnancy. CAT is constitutively expressed in both the fetal and maternal thymuses, and in the placenta, but in no other tissues. Placental CAT activity first becomes measurable at day 13 of gestation, peaks at day 16, and is maintained at high levels until parturition. Crosses between transgenic and non-transgenic mice clearly indicate that the trophoblast, rather than the decidua or uterus, is the source of CAT activity. A soluble TNF receptor/IgG heavy chain chimeric protein, which strongly inhibits TNF activity in vitro and in vivo, was shown to cross the placenta, gaining access to the fetal circulation when administered on the maternal side. However, the chimeric protein did not interrupt pregnancy, and had no obvious effect on fetal development, suggesting that TNF may not be required for completion of a normal gestation.