Periconceptional folic acid supplementation reduces the occurrence of several human congenital malformations, including craniofacial, heart and neural tube defects. Although the underlying mechanism is unknown, there may be a maternal-to-fetal folate-transport defect or an inherent fetal biochemical disorder that is neutralized by supplementation. Previous experiments have identified a folate-binding protein (Folbp1) that functions as a membrane receptor to mediate the high-affinity internalization and delivery of folate to the cytoplasm of the cell. In vitro, this receptor facilitates the accumulation of cellular folate a thousand-fold relative to the media, suggesting that it may be essential in cytoplasmic folate delivery in vivo. The importance of an adequate intracellular folate pool for normal embryogenesis has long been recognized in humans and experimental animals. To determine whether Folbp1 is involved in maternal-to-fetal folate transport, we inactivated Folbp1 in mice. We also produced mice lacking Folbp2, another member of the folate receptor family that is GPI anchored but binds folate poorly. Folbp2-/- embryos developed normally, but Folbp1-/- embryos had severe morphogenetic abnormalities and died in utero by embryonic day (E) 10. Supplementing pregnant Folbp1+/- dams with folinic acid reversed this phenotype in nullizygous pups. Our results suggest that Folbp1 has a critical role in folate homeostasis during development, and that functional defects in the human homologue (FOLR1) of Folbp1 may contribute to similar defects in humans.