We describe the successful application of a modified gene-trap approach, the secretory trap, to systematically analyze the functions in vivo of large numbers of genes encoding secreted and membrane proteins. Secretory-trap insertions in embryonic stem cells can be transmitted to the germ line of mice with high efficiency and effectively mutate the target gene. Of 60 insertions analyzed in mice, one-third cause recessive lethal phenotypes affecting various stages of embryonic and postnatal development. Thus, secretory-trap mutagenesis can be used for a genome-wide functional analysis of cell signaling pathways that are critical for normal mammalian development and physiology.