Transgenic mice that overexpress insulin-like growth factor-binding protein-1 (IGFBP-1) demonstrate a reduced litter size compared to nontransgenic, wild-type mice derived from the same genetic background. To determine the mechanism underlying this phenomenon, we examined the number of ovulatory follicles per cycle in naturally mated transgenic and wild-type mice by counting the corpora lutea and the blastocysts harvested by uterine flushing. In addition, we investigated the effects of insulin-like growth factor-I (IGF-I) on blastocyst DNA synthesis and examined the effects of a transgenic maternal environment on fetal outcome by cross transfer of blastocysts. Significantly fewer corpora lutea were observed in ovaries from transgenic vs. wild-type mice (7.6 ± 1.8 vs. 11.8 ± 1.5), and fewer blastocysts were harvested from transgenic mice compared to wild-type mice (7.6 ± 2.3 vs. 10.1 ± 2.0). DNA content and basal DNA synthesis were similar in blastocysts from nontransgenic and transgenic mice. However, unlike wild-type blastocysts, transgenic blastocysts did not respond to IGF-I with an increase in DNA synthesis. To determine the effects of maternal environment on fetal outcome, a mixture of equal numbers of transgenic and nontransgenic blastocysts was transferred into foster mothers. The ratio of transgenic to nontransgenic pups was not significantly different from the theoretically predicted value of 1. However, the litter size was significantly reduced in wild-type compared to transgenic foster mothers. These data suggest that the reduced fecundity is due to reduced ovulation and blastocyst number. Furthermore, expression of the transgene in neither the blastocyst nor the maternal tissues had any significant negative effect on implantation or fetal wastage.