Human cytomegalovirus (HCMV) is a major cause of birth defects that include severe neurological deficits, hearing and vision loss, and intrauterine growth restriction. Viral infection of the placenta leads to development of avascular villi, edema, and hypoxia associated with symptomatic congenital infection. Studies of primary cytotrophoblasts (CTBs) revealed that HCMV infection impedes terminal stages of differentiation and invasion by various molecular mechanisms. We recently discovered that HCMV arrests earlier stages involving development of human trophoblast progenitor cells (TBPCs), which give rise to the mature cell types of chorionic villi-syncytiotrophoblasts on the surfaces of floating villi and invasive CTBs that remodel the uterine vasculature. Here, we show that viral proteins are present in TBPCs of the chorion in cases of symptomatic congenital infection. In vitro studies revealed that HCMV replicates in continuously self-renewing TBPC lines derived from the chorion and alters expression and subcellular localization of proteins required for cell cycle progression, pluripotency, and early differentiation. In addition, treatment with a human monoclonal antibody to HCMV glycoprotein B rescues differentiation capacity, and thus, TBPCs have potential utility for evaluation of the efficacies of novel antiviral antibodies in protecting and restoring placental development. Our results suggest that HCMV replicates in TBPCs in the chorion in vivo, interfering with the earliest steps in the growth of new villi, contributing to virus transmission and impairing compensatory development. In cases of congenital infection, reduced responsiveness of the placenta to hypoxia limits the transport of substances from maternal blood and contributes to fetal growth restriction.Human cytomegalovirus (HCMV) is a leading cause of birth defects in the United States. Congenital infection can result in permanent neurological defects, mental retardation, hearing loss, visual impairment, and pregnancy complications, including intrauterine growth restriction, preterm delivery, and stillbirth. Currently, there is neither a vaccine nor any approved treatment for congenital HCMV infection during gestation. The molecular mechanisms underlying structural deficiencies in the placenta that undermine fetal development are poorly understood. Here we report that HCMV replicates in trophoblast progenitor cells (TBPCs)-precursors of the mature placental cells, syncytiotrophoblasts and cytotrophoblasts, in chorionic villi-in clinical cases of congenital infection. Virus replication in TBPCs in vitro dysregulates key proteins required for self-renewal and differentiation and inhibits normal division and development into mature placental cells. Our findings provide insights into the underlying molecular mechanisms by which HCMV replication interferes with placental maturation and transport functions.