Methyl CpG-binding protein 2 gene (MeCP2) mutations are implicated in Rett syndrome (RTT), one of the common causes of female mental retardation. Two MeCP2 isoforms have been reported: MeCP2_e2 (splicing of all four exons) and MeCP2_e1 (alternative splicing of exons 1, 3, and 4). Their relative expression levels vary among tissues, with MeCP2_e1 being more dominant in adult brain, whereas MeCP2_e2 is expressed more abundantly in placenta, liver, and skeletal muscle. In this study, we performed specific disruption of the MeCP2_e2-defining exon 2 using the Cre-loxP system and examined the consequences of selective loss of MeCP2_e2 function in vivo. We performed behavior evaluation, gene expression analysis, using RT-PCR and real-time quantitative PCR, and histological analysis. We demonstrate that selective deletion of MeCP2_e2 does not result in RTT-associated neurological phenotypes but confers a survival disadvantage to embryos carrying a MeCP2_e2 null allele of maternal origin. In addition, we reveal a specific requirement for MeCP2_e2 function in extraembryonic tissue, where selective loss of MeCP2_e2 results in placenta defects and up-regulation of peg-1, as determined by the parental origin of the mutant allele. Taken together, our findings suggest a novel role for MeCP2 in normal placenta development and illustrate how paternal X chromosome inactivation in extraembryonic tissues confers a survival disadvantage for carriers of a mutant maternal MeCP2_e2 allele. Moreover, our findings provide an explanation for the absence of reports on MeCP2_e2-specific exon 2 mutations in RTT. MeCP2_e2 mutations in humans may result in a phenotype that evades a diagnosis of RTT.