Nodal, a member of the transforming growth factor-beta superfamily, is known to play critical roles in early vertebrate development, but its functions in extraembryonic tissues are unclear. ALK7 is a type I receptor for Nodal. Recently, we demonstrated that Nodal mRNA and several ALK7 transcripts are expressed in human placenta throughout pregnancy (Roberts, H. J., Hu, S., Qiu, Q., Leung, P. C. K., Cannigia, I., Gruslin, A., Tsang, B., and Peng, C. (2003) Biol. Reprod. 68, 1719-1726). In this study, we determined the role of Nodal and ALK7 in trophoblast cell proliferation and apoptosis. Overexpression of Nodal in normal trophoblast cells (HTR8/SVneo) and several choriocarcinoma cell lines resulted in a significant decrease in the number of metabolically active cells. The effect of Nodal could be mimicked by constitutively active ALK7 (ALK7-ca), but was blocked by kinase-deficient ALK7. The growth inhibitory effect of Nodal was also blocked by dominant-negative Smad2/3. Overexpression of Nodal and ALK7-ca induced apoptosis in trophoblast cells as determined by Hoechst staining, flow cytometry, and caspase-3 Western blotting. In addition, Nodal and ALK7-ca decreased the number of proliferating cells as measured by bromodeoxyuridine assays. Furthermore, overexpression of Nodal or ALK7-ca increased p27 expression, but reduced the levels of Cdk2 and cyclin D(1). Taken together, this study demonstrates for the first time that Nodal, acting through ALK7 and Smad2/3, inhibits proliferation and induces apoptosis in human trophoblast cells. Our findings also suggest that the Nodal-ALK7 pathway inhibits cell proliferation by inducing G(1) cell cycle arrest and that this effect is mediated in part by the p27-cyclin E/Cdk2 pathway.