The development of eutherian mammalian embryos is critically dependent on the selective bi-directional transport of molecules across the placenta. Here, we uncover two independent and partially redundant protease signaling pathways that include the membrane-anchored serine proteases, matriptase and prostasin, and the G protein-coupled receptor PAR-2 that mediate the establishment of a functional feto-maternal barrier. Mice with a combined matriptase and PAR-2 deficiency do not survive to term and the survival of matriptase-deficient mice heterozygous for PAR-2 is severely diminished. Embryos with the combined loss of PAR-2 and matriptase or PAR-2 and the matriptase partner protease, prostasin, uniformly die on or before embryonic day 14.5. Despite the extensive co-localization of matriptase, prostasin, and PAR-2 in embryonic epithelia, the overall macroscopic and histological analysis of the double-deficient embryos did not reveal any obvious developmental abnormalities. In agreement with this, the conditional deletion of matriptase from the embryo proper did not affect the prenatal development or survival of PAR-2-deficient mice, indicating that the critical redundant functions of matriptase/prostasin and PAR-2 are limited to extraembryonic tissues. Indeed, placentas of the double-deficient animals showed decreased vascularization, and the ability of placental epithelium to establish a functional feto-maternal barrier was severely diminished. Interestingly, molecular analysis suggested that the barrier defect was associated with a selective deficiency in the expression of the tight junction protein, claudin-1. Our results reveal unexpected complementary roles of matriptase-prostasin- and PAR-2-dependent proteolytic signaling in the establishment of placental epithelial barrier function and overall embryonic survival.