Mammalian Tolloid-like 1 (mTLL-1) is an astacin-like metalloprotease, highly similar in domain structure to the morphogenetically important proteases bone morphogenetic protein-1 (BMP-1) and Drosophila Tolloid. To investigate possible roles for mTLL-1 in mammalian development, we have used gene targeting in ES cells to produce mice with a disrupted allele for the corresponding gene, Tll1. Homozygous mutants were embryonic lethal, with death at mid-gestation from cardiac failure and a unique constellation of developmental defects that were apparently confined solely to the heart. Constant features were incomplete formation of the muscular interventricular septum and an abnormal and novel positioning of the heart and aorta. Consistent with roles in cardiac development, Tll1 expression was specific to precardiac tissue and endocardium in 7.5 and 8.5 days p.c. embryos, respectively. Tll1 expression was also high in the developing interventricular septum, where expression of the BMP-1 gene, Bmp1, was not observed. Cardiac structures that were not affected in Tll1-/- embryos either showed no Tll1 expression (atrio-ventricular cushions) or showed overlapping expression of Tll1 and Bmp1 (aortico-pulmonary septum), suggesting that products of the Bmp1 gene may be capable of functionally substituting for mTLL-1 at sites in which they are co-expressed. Together, the various data show that mTLL-1 plays multiple roles in formation of the mammalian heart and is essential for formation of the interventricular septum.