The Frat1 gene was first identified as a proto-oncogene involved in progression of mouse T cell lymphomas. More recently, FRAT/GBP (GSK-3beta Binding Protein) family members have been recognized as critical components of the Wnt signal transduction pathway. In an attempt to gain more insight into the function of Frat1, we have generated Frat1-deficient mice in which most of the coding domain was replaced by a promoterless beta-galactosidase reporter gene. While the pattern of LacZ expression in Frat1(lacZ)/+ mice indicated Frat1 to be expressed in various neural and epithelial tissues, homozygous Frat1(lacZ) mice were apparently normal, healthy and fertile. Tissues of homozygous Frat1(lacZ) mice showed expression of a second mouse Frat gene, designated Frat3. The Frat1 and Frat3 proteins are structurally and functionally very similar, since both Frat1 and Frat3 are capable of inducing a secondary axis in Xenopus embryos. The overlapping expression patterns of Frat1 and Frat3 during murine embryogenesis suggest that the apparent dispensability of Frat1 for proper development may be due to the presence of a second mouse gene encoding a functional Frat protein.