Syncytin 2 is a newly identified placental membrane protein with fusogenic and immunosuppressive activities. Major facilitator superfamily domain containing 2A (MFSD2A) is the cognate receptor for syncytin 2-mediated cell-cell fusion. Both syncytin 2 and MFSD2A are highly expressed in placenta. In this study to understand the regulation of syncytin 2 and MFSD2A expression in placenta, we found that syncytin 2 gene is epigenetically silenced in nonplacental cells by cytosine-phosphate-guanine (CpG) dinucleotide methylation and that expression of syncytin 2 and MFSD2A genes are regulated by the placental transcription factor GCM1 in placental cells. Functional GCM1-binding sites were identified in syncytin 2 and MFSD2A promoters based on electrophoretic mobility shift assay and chromatin immunoprecipitation assay. Because GCM1 activity is decreased in hypoxic placental cells, we further confirmed that expression of MFSD2A is downregulated in hypoxic BeWo choriocarcinoma cells. Interestingly, ectopic expression of GCM1 activated syncytin 2 and MFSD2A expression in MCF-7 breast cancer cells and facilitated MCF-7 cell fusion. The expression of syncytin 2 in MCF-7 cells was partly attributed to CpG demethylation in the syncytin 2 promoter in the presence of GCM1. Our results suggest that GCM1 is a critical factor in controlling placental cell fusion through transcriptional regulation of syncytin 2 and MFSD2A gene expression in placenta. In addition, GCM1 may also play an important role in the epigenetic regulation of syncytin 2 gene expression.