Mammalian blastocyst hatching is a critically indispensable process for successful implantation. One of the major challenges in IVF clinics is to achieve superior embryonic development with intrinsically potent hatching-competent blastocyst. However, the molecular regulation of hatching phenomenon is poorly understood. In this study, we examined the expression and function of one of the cytokines, IL-1β during blastocyst hatching in the mouse. In particular, the expression of IL-1β (Interleukin-1β), IL-1ra (Interleukin-1 receptor antagonist) and their functional receptor IL-1rt1 (Interleukin 1 receptor type-1) in morulae, zona intact- and hatched-blastocysts was studied. Supplementation of IL-1β to cultured embryos accelerated blastocyst development with improved hatching (treated: 89.6 ± 3.6% vs untreated: 65.4 ± 4.1%). When embryos were treated with IL-1ra, blastocyst hatching was decreased (treated: 28.8 ± 3.1% vs untreated: 67.5 ± 3.8%). Moreover, IL-1β and IL-1ra influenced the expression of hatching enzymes viz., implantation serine proteases (ISP1 and ISP2). While IL-1β increased the embryonic mRNA expression of ISPs (Isp1: 2–4; Isp2: 9- to 11-fold), IL-1ra decreased expression. The protein localization studies revealed increased nuclear presence predominantly of ISP 2 in IL-1β-treated blastocysts. This is the first report to show the functional significance of embryonic IL-1β in regulating hatching-associated proteases, particularly ISP2. These findings have implications in our understanding of molecular regulation of blastocyst hatching and implantation failure in other species including humans.