Cell cultures of early mouse placentae were studied in the presence of mouse amniotic fluid or isolated alpha-fetoprotein (AFP). Four cell types were observed: polygonal cells, giant cells, small round cells and fibroblasts. The number of polygonal cells increased in placental cultures in the presence of amniofic fluid or AFP, suggesting de novo formation and proliferation in vitro. These preparations were found to stimulate the DNA synthesis in polygonal cells, as demonstrated by 3H-thymidine labelling experiments. Polygonal cells also show a significant increase in 3H-leucine incorporation, indicating more active protein synthesis under the effect of amniotic fluid or AFP. These data suggest that AFP may be one of the fetal factors promoting trophoblastic differentiation.