The suppressor of cytokine-signaling (SOCS) proteins act as negative-feedback inhibitors of cytokine and growth-factor-induced signal transduction. In vivo studies have implicated SOCS3 as a negative regulator of signaling downstream of gp130, the receptor subunit shared by IL-6-like cytokines. Mice lacking SOCS3 die at midgestation because of placental failure, and SOCS3 ablation in a cell-type-specific manner results in changes in the functional outcome of gp130 signaling in response to IL-6. In this study, we show that genetic reduction of leukemia-inhibitory factor (LIF) production by embryo-derived tissues is sufficient to prevent the placental defect. This establishes LIF signaling as a major physiological regulator of trophoblast differentiation in vivo. Mice deficient in both SOCS3 and LIF are born in predicted numbers and appear normal at birth but exhibit failure to thrive and high neonatal mortality. Adult SOCS3-null mice on a LIF-null background succumb to a spontaneous fatal inflammatory disease characterized by neutrophilia and inflammatory-cell tissue infiltrates. The disease spectrum mimics that seen in mice with a conditional deletion of SOCS3 in hematopoietic and endothelial cells, extending the evidence for a major role for SOCS3 in the homeostatic regulation of the inflammatory response and indicates that LIF is not required for this process.