The placenta is an endocrinologically active organ and expresses an important number of polypeptide hormone genes. Although oxytocin (OT)-like immunoreactivity has been detected in placental extracts by RIA, the precise nature and origin of placental OT has remained unclear. In the present study, we examined OT gene expression in rat placental tissue at various stages of gestation using northern blot analysis, polymerase chain reaction, in situ hybridization, HPLC, and immunocytochemistry. Northern blot analysis of RNA extracted from rat placenta revealed a single type of OT gene transcript (0.66 kilobases) which differed in size from hypothalamic OT transcripts (0.75 kilobases). Deadenylation of placental and hypothalamic messenger RNA (mRNA) showed that this size difference was due to differences in poly(A) tail lengths. Polymerase chain reaction amplification of placental and hypothalamic complementary DNAs using four different exon-specific primers provided no evidence for the existence of any additional structural differences between hypothalamic and placental OT-gene transcripts. Quantitative evaluation of northern blots showed that OT mRNA abundance per microgram of total RNA was stage specific and declined by a factor of 6 from day 14 to day 21 of gestation. In contrast to the marked variation of mRNA abundance, the OT peptide content, as measured by RIA, underwent no significant change during the time period studied and varied between 0.37-0.51 ng/g wet tissue wt. Characterization of placental OT immunoreactivity by HPLC and gel filtration identified two peaks of immunoreactivity: one peak (70% of immunoreactivity) corresponded to synthetic OT; whereas the other peak (M(r) 11,000, 30% of immunoreactivity) represented a noncovalent association between OT and another molecule, consistent with the formation of a neurophysin/OT complex. By in situ hybridization and immunocytochemistry, we localized OT mRNA and OT immunoreactivity to cells of the trophoblastic epithelium covering the septa of the labyrinth as well as to cytotrophoblastic elements and giant cells of the maternally derived basal zone of the placenta. Placental OT may act locally, may interact with uterine OT receptors, or may play a role in fetal development.