The actin cytoskeleton plays a central role in establishing cell polarity and shape during embryonic morphogenesis. Daam1, a member of the Formin family of actin cytoskeleton regulators, is a Dvl2-binding protein that functions in the Wnt/Planar Cell Polarity (PCP) pathway. To examine the role of the Daam proteins in mammalian development, we generated Daam-deficient mice by gene targeting and found that Daam1, but not Daam2, is necessary for fetal survival. Embryonic development of Daam1 mutants was delayed most likely due to functional defects in the labyrinthine layer of the placenta. Examination of Daam2 and Daam1/2 double mutants revealed that Daam1 and Daam2 are functionally redundant during placental development. Of note, neural tube closure defects (NTD), which are observed in several mammalian PCP mutants, are not observed in Wnt5a or Daam1 single mutants, but arise in Daam1;Wnt5a double mutants. These findings demonstrate a unique function for Daam genes in placental development and are consistent with a role for Daam1 in the Wnt/PCP pathway in mammals.