The dominant lymphocytes in human and murine implantation sites are transient, pregnancy-associated uterine natural killer (uNK) cells. These cells are a major source of interferon (IFN)-γ. Implantation sites in mice lacking uNK cells (alymphoid recombinase activating gene [RAG]-2−/− common cytokine receptor chain γ [γc]−/−) or IFN-γ signaling (IFN-γ−/− or IFN-γRα−/−) fail to initiate normal pregnancy-induced modification of decidual arteries and display hypocellularity or necrosis of decidua. To investigate the functions of uNK cell–derived IFN-γ during pregnancy, RAG-2−/−γc−/− females were engrafted with bone marrow from IFN-γ−/− mice, IFN-γ signal-disrupted mice (IFN-γRα−/− or signal transducer and activator of transcription [Stat]-1−/−), or from mice able to establish normal uNK cells (severe combined immunodeficient [SCID] or C57BL/6). Mated recipients were analyzed at midgestation. All grafts established uNK cells. Grafts from IFN-γ−/− mice did not reverse host vascular or decidual pathology. Grafts from all other donors promoted modification of decidual arteries and decidual cellularity. Grafts from IFN-γRα−/− or Stat-1−/− mice overproduced uNK cells, all of which were immature. Grafts from IFN-γ−/−, SCID, or C57BL/6 mice produced normal, mature uNK cells. Administration of murine recombinant IFN-γ to pregnant RAG-2−/−γc−/− mice initiated decidual vessel modification and promoted decidual cellularity in the absence of uNK cells. These in vivo findings strongly suggest that uNK cell–derived IFN-γ modifies the expression of genes in the uterine vasculature and stroma, which initiates vessel instability and facilitates pregnancy-induced remodeling of decidual arteries.