The gene tailless is a member of the superfamily of genes that encode transcription factors of the ligand-activated nuclear receptor type, and is expressed in the invertebrate and vertebrate brain. In mice, its transcripts are restricted to the periventricular zone of the forebrain, the site of origin of neurons and glia. Here we use homologous recombination to generate mice that lack a functional tailless protein. Homozygous mutant mice are viable at birth, indicating that tailless is not required for prenatal survival; however, adult mutant mice show a reduction in the size of rhinencephalic and limbic structures, including the olfactory, infrarhinal and entorhinal cortex, amygdala and dentate gyrus. Both male and female mice are more aggressive than usual and females lack normal maternal instincts. These animals therefore enable a molecular approach to be taken towards understanding the genetic architecture and morphogenesis of the forebrain.