Oocyte-cumulus cell bidirectional communication is essential for normal development of the oocyte and cumulus cells (CCs) within the follicle. We showed recently that addition of recombinant growth differentiation factor 9 (GDF9), which signals through the SMAD2/3 pathway, during mouse oocyte in vitro maturation (IVM) increased fetal viability. This study thus aimed to observe the effects of disrupting oocyte-CC bidirectional communication during IVM on oocyte developmental competence and fetal outcomes. Cumulus-oocyte complexes (COCs) from equine chorionic gonadotropin-primed prepubertal (CBA/C57BL6) mice were cultured with or without 50 mIU/ml follicle-stimulating hormone (FSH) and 10 ng/ml epidermal growth factor (EGF) or 4 μM SMAD2/3 inhibitor SB-431542. Cumulus expansion and first polar body extrusion were then assessed, or COCs were fertilized and stained to evaluate sperm entry or cultured to the blastocyst stage. Embryo development and blastocyst quality were assessed, and Day 4.5 blastocysts were transferred to pseudopregnant recipients to analyze fetal outcomes. SMAD2/3 inhibition or FSH/EGF absence during IVM resulted in decreased cumulus expansion. First polar body extrusion and sperm entry were decreased in the absence of FSH/EGF, whereas only sperm entry was affected in SB-431542-matured COCs. Embryo development and blastocyst rates were unaffected; however, blastocyst quality was significantly altered, with reduced inner cell mass cell numbers in embryos derived from COCs matured in both treatments. When COCs were matured with SB-431542 in the absence of FSH/EGF, cumulus expansion was reduced, but fertilization, embryo development, and embryo quality were not. Inhibition of SMAD2/3 signaling in the presence of FSH/EGF significantly reduced fetal survival but had no effect on implantation or fetal and placental dimensions and morphology.