Cadmium, a common environmental pollutant and a major constituent of tobacco smoke, has been identified as a new class of endocrine disruptors with a wide range of detrimental effects on mammalian reproduction. During human pregnancy maternal cadmium exposure, via the environment and/or cigarette smoking, leads to fetal growth restriction (FGR), but the underlying mechanisms are unknown. Although a substantial amount of evidence suggests that cadmium may affect fetal growth indirectly via the placenta, the molecular targets remain to be identified. Given that reduced placental 11-hydroxysteroid dehydrogenase type 2 (11-HSD2; encoded by HSD11B2 gene) is causally linked to FGR, the present study was undertaken to examine the hypothesis that cadmium induces FGR in part by targeting placental HSD11B2. Using cultured human trophoblast cells as a model system, we showed that cadmium exposure resulted in a time- and concentration-dependent decrease in 11-HSD2 activity; such that an 80% reduction was observed after 24 h treatment at 1 µM. It also led to a similar decrease in levels of 11-HSD2 protein and mRNA, suggesting that cadmium reduced 11-HSD2 expression. Furthermore, cadmium diminished HSD11B2 promoter activity, indicative of repression of HSD11B2 gene transcription. In addition, the effect of cadmium was highly specific in that other divalent metals (Zn²⁺, Mg²⁺, and Mn²⁺) as well as nicotine and cotinine (a major metabolite of nicotine) did not alter 11-HSD2 activity. Taken together, these findings demonstrate that cadmium reduces human placental 11-HSD2 expression and activity by suppressing HSD11B2 gene transcription. Thus, the present study identifies placental 11-HSD2 as a novel molecular target of cadmium. It also reveals a molecular mechanism by which this endocrine disruptor, and by inference cigarette smoking, may affect human placental function, and consequently fetal growth and development.