Increased glucocorticoid exposure reduces fetal growth and predisposes to an increased risk of disease in later life. In addition to direct effects on fetal growth, glucocorticoids also compromise fetal growth indirectly via detrimental effects on placental growth and function. The current study investigated the effects of dexamethasone-induced intrauterine growth restriction on placental vascular development and expression of the endothelial cell-specific mitogen, vascular endothelial growth factor (VEGF). Separate analyses were conducted for the three main VEGF isoforms (VEGF₁₂₀, VEGF₁₆₄ and VEGF₁₈₈) in the two functionally- and morphologically-distinct regions of the rat placenta, the basal and labyrinth zones. Quantitative PCR and immunohistochemical analysis demonstrated that expression of VEGF was markedly upregulated specifically in the rapidly-growing labyrinth zone over the final third of normal pregnancy. Unbiased stereological analyses showed an associated increase in the volume and surface area of maternal and fetal blood spaces, including vascular remodeling of the fetal capillary network near term. In contrast, dexamethasone-induced fetal and placental growth restriction reduced expression of the Vegf₁₂₀ and Vegf₁₈₈ isoforms and prevented normal labyrinthine vascular development near term. Most notably, dexamethasone impaired the normal increase in fetal vessel density over the final third of pregnancy, with no effect on the density of maternal blood spaces. Overall, this study quantifies the labyrinth zone-specific increases in placental VEGF expression and vascular development during normal pregnancy, and shows that these increases are prevented by maternal dexamethasone treatment. Our data suggest that glucocorticoid-induced restriction of fetal and placental growth is mediated, in part, via inhibition of placental VEGF expression and an associated reduction in placental vascularization.