Placental mesenchymal dysplasia (PMD) is a rare human disorder associated with stillbirth, intrauterine growth restriction (IUGR) and Beckwith-Wiedemann syndrome. Although the morphology of this condition has been described in 86 cases, the underlying cellular origin is unclear. We investigate the placental cell type involved in a case of PMD associated with a live born female infant with IUGR. In PMD intermediate villi contain cisternae, lined by non-proliferative cells. Immunostaining reveals they are not of trophoblast or vascular endothelial origin. There is positive immunostaining for lymphatic endothelium; this abnormal lymphangiogenesis is in concordance with current hypotheses regarding the aetiology of PMD. Furthermore, such observations suggest that placental villous mesenchyme may differentiate into various cell types, even those not normally found in the human placenta.