The Xenopus cerberus gene encodes a secreted factor expressed in the Spemann organizer that can cause ectopic head formation when its mRNA is injected into Xenopus embryos. In mouse, the cerberus-related gene, Cerr1, is expressed in the anterior mesendoderm that underlies the presumptive anterior neural plate and its expression is downregulated in Lim1 headless embryos. To determine whether Cerr1 is required for head formation we generated a null mutation in Cerr1 by gene targeting in mouse embryonic stem cells. We found that head formation is normal in Cerr1(-/-) embryos and we detected no obvious phenotypic defects in adult Cerr1(-/-) mice. However, in embryonic tissue layer recombination assays, Cerr1(-/-) presomitic/somitic mesoderm, unlike Cerr1-expressing wild-type presomitic/somitic mesoderm, was unable to maintain expression of the anterior neural marker gene Otx2 in ectoderm explants. These findings suggest that establishment of anterior identity in the mouse may involve the action of multiple functionally redundant factors.