The N-myc gene is considered to play a major regulatory role in embryogenesis of the mouse because of its high expression in the organogenesis period and its encoding of nuclear proteins with DNA binding motifs. To elucidate the putative regulatory function of N-myc in embryogenesis, we undertook to inactivate this gene in ES cells. The N-myc alleles were disrupted in ES cells, line E14, by means of homologous recombination of targeting vectors that carry neomycin or hygromycin resistant genes. Homologous recombinants were obtained at the frequency of one in 6 x 10(5) electroporated cells. The inactivated N-myc alleles were transmitted through mouse germ lines. Crosses of heterozygous mice resulted in production of wild-type, heterozygous, and N-myc-null pups and fetuses at a ratio of 1:2:0, indicating embryonic lethality of the homozygotes. ES cells totally deficient in N-myc expression were also obtained by consecutive gene disruption with the use of the targeting vectors, demonstrating the non-essentiality of N-myc expression in the stem-cell state. N-myc-null ES cells offer a valuable tool in chimera analysis to elucidate the requirement for N-myc function in embryogenesis.