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Environmental hypoxia challenges female reproductive physiology in placental mammals, increasing rates of gestational complications. Adaptation to high elevation has limited many of these effects in humans and other mammals, offering potential insight into the developmental processes that lead to and protect against hypoxia-related gestational complications. However, our understanding of these adaptations has been hampered by a lack of experimental work linking the functional, regulatory, and genetic underpinnings of gestational development in locally adapted populations. Here, we dissect high-elevation adaptation in the reproductive physiology of deer mice (Peromyscus maniculatus), a rodent species with an exceptionally broad elevational distribution that has emerged as a model for hypoxia adaptation. Using experimental acclimations, we show that lowland mice experience pronounced fetal growth restriction when challenged with gestational hypoxia, while highland mice maintain normal growth by expanding the compartment of the placenta that facilitates nutrient and gas exchange between gestational parent and fetus. We then use compartment-specific transcriptome analyses to show that adaptive structural remodeling of the placenta is coincident with widespread changes in gene expression within this same compartment. Genes associated with fetal growth in deer mice significantly overlap with genes involved in human placental development, pointing to conserved or convergent pathways underlying these processes. Finally, we overlay our results with genetic data from natural populations to identify candidate genes and genomic features that contribute to these placental adaptations. Collectively, these experiments advance our understanding of adaptation to hypoxic environments by revealing physiological and genetic mechanisms that shape fetal growth trajectories under maternal hypoxia.