The WD-repeat proteins Rae1 and Bub3 show extensive sequence homology, indicative of functional similarity. However, previous studies have suggested that Rae1 is involved in the mRNA export pathway and Bub3 in the mitotic checkpoint. To determine the in vivo roles of Rae1 and Bub3 in mammals, we generated knockout mice that have these genes deleted individually or in combination. Here we show that haplo-insufficiency of either Rae1 or Bub3 results in a similar phenotype involving mitotic checkpoint defects and chromosome missegregation. We also show that overexpression of Rae1 can correct for Rae1 haplo-insufficiency and, surprisingly, Bub3 haplo-insufficiency. Rae1-null and Bub3-null mice are embryonic lethal, although cells from these mice did not have a detectable defect in nuclear export of mRNA. Unlike null mice, compound haplo-insufficient Rae1/Bub3 mice are viable. However, cells from these mice exhibit much greater rates of premature sister chromatid separation and chromosome missegregation than single haplo-insufficient cells. Finally, we show that mice with mitotic checkpoint defects are more susceptible to dimethylbenzanthrene-induced tumorigenesis than wild-type mice. Thus, our data demonstrate a novel function for Rae1 and characterize Rae1 and Bub3 as related proteins with essential, overlapping, and cooperating roles in the mitotic checkpoint.