Conditional deletion of the mouse Forkhead Box (Fox) m1b targeted allele in adult hepatocytes (Foxm1, previously called HFH-11B, Trident, Win, or MPP2) demonstrated that the Foxm1b transcription factor is essential for hepatocyte mitosis during liver regeneration. To determine the role of Foxm1b in liver development, we have generated Foxm1b -/- mice that deleted the Foxm1b exons encoding the winged helix DNA binding and transcriptional activation domains. Here, we show that all of the Foxm1b -/- embryos died in utero by 18.5 days postcoitum (dpc). Embryonic Foxm1b -/- livers displayed a 75% reduction in the number of hepatoblasts, resulting from diminished DNA replication and a failure to enter mitosis causing a polyploid phenotype. Reduced hepatoblast mitosis was associated with decreased protein levels of the Polo-like kinase 1 and Aurora B kinase, which phosphorylate regulatory proteins essential for orchestrating mitosis and cytokinesis. Diminished proliferation of Foxm1b -/- hepatoblasts contributed to abnormal liver development with significant reduction in the number of large hepatic veins compared to embryonic wild-type (WT) liver. Furthermore, embryonic Foxm1b -/- livers did not develop intrahepatic bile ducts, and these presumptive biliary hepatoblasts failed to express either biliary cytokeratins or nuclear levels of hepatocyte nuclear factor 1beta. These results suggest that Foxm1b is critical for hepatoblast precursor cells to differentiate toward biliary epithelial cell lineage. Finally, we used a hepatoblast-specific Cre recombinase transgene to mediate deletion of the Foxm1b fl/fl allele in the developing liver, and these embryos died in utero and exhibited diminished hepatoblast proliferation with similar abnormalities in liver morphogenesis, suggesting that the defect in liver development contributed to embryonic lethality.