In the uterus, the formation of new maternal blood vessels in the stromal compartment at the time of embryonic implantation is critical for the establishment and maintenance of pregnancy. Although uterine angiogenesis is known to be influenced by the steroid hormones estrogen (E) and progesterone(P), the underlying molecular pathways remain poorly understood. Here, we report that the expression of connexin 43 (Cx43), a major gap junction protein, is markedly enhanced in response to E in uterine stromal cells surrounding the implanted embryo during the early phases of pregnancy. Conditional deletion of the Cx43 gene in these stromal cells and the consequent disruption of their gap junctions led to a striking impairment in the development of new blood vessels within the stromal compartment, resulting in the arrest of embryo growth and early pregnancy loss. Further analysis of this phenotypical defect revealed that loss of Cx43 expression resulted in aberrant differentiation of uterine stromal cells and impaired production of several key angiogenic factors, including the vascular endothelial growth factor (Vegf). Ablation of CX43 expression in human endometrial stromal cells in vitro led to similar findings. Collectively, these results uncovered a unique link between steroid hormone-regulated cell-cell communication within the pregnant uterus and the development of an elaborate vascular network that supports embryonic growth. Our study presents the first evidence that Cx43-type gap junctions play a critical and conserved role in modulating stromal differentiation, and regulate the consequent production of crucial paracrine signals that control uterine neovascularization during implantation.