Methylnitrosourea (MNU) is a potent carcinogen and teratogen that is associated with central nervous system, craniofacial, skeletal, ocular, and appendicular birth defects following transplacental exposure at critical time points during development, and preliminary studies have suggested that nonspecific maternal immunostimulation may offer protection against development of these birth defects. Our study examined morphologic alterations in fetal limb and digital development and placental integrity following maternal exposure to MNU on GD 9 in CD-1 mice, and characterized the improvement in placental integrity and abrogation of fetal defects following maternal immune stimulation with interferon-gamma (IFN-gamma) on GD 7. Fetal limbs were significantly shortened (p < 0.0001) and incidence of limb and digital defects (syndactyly, polydactyly, oligodactyly, clubbing, and webbing) was dramatically increased following mid-gestational maternal MNU exposure. Maternal immune stimulation with IFN-gamma on GD 7 lessened incidence of fetal limb shortening and maldevelopment on GD 12 and 14. Further, disruption of placental spongiotrophoblast integrity, increased cell death in placental trophoblasts with increased intercellular spaces in the spongiotrophoblast layer and minimal inflammation, and increased loss of fetal labyrinthine endothelial cells from MNU-exposed dams suggested that MNU-induced placental breakdown may contribute to fetal limb and digital maldevelopment. MNU + IFN-gamma was associated with diminished cell death within all layers of the placenta, especially in the labyrinthine layer. These data verify improved distal limb development in MNU-exposed mice as a result of maternal IFN-gamma administration, and suggest a link between placental integrity and proper fetal development.