In mice, approximately 1,000 odorant receptor (OR) genes are expressed in olfactory sensory neurons (OSNs). Homeodomain sites can be recognized in the promoter and upstream regions of several OR genes. Here, using the yeast one-hybrid system and electrophoretic mobility shift assay, we report that Lhx2, a LIM-homeodomain protein, binds to the homeodomain site in the mouse M71 OR promoter region. In Lhx2-deficient mice, the morphology of the olfactory epithelium is grossly normal. However, expression of OMP is abolished and that of GAP43 is severely reduced, indicating that no mature and few immature OSNs are produced. M71 and other OR genes also are not expressed. OSN development appears to be arrested between the terminal differentiation into neurons and the transition to immature neurons. Thus, Lhx2 is required for complete development of OSNs in mice.