The murine septin4 gene (Sept4) has been implicated in diverse cellular functions, including cytokinesis, apoptosis, and tumor suppression. Here, we investigated the function of Sept4 proteins during mouse development by creating a targeted deletion of the Sept4 genomic locus. Sept4 mutant mice are viable but male sterile due to immotile and structurally defective sperm. During spermatogenesis, Sept4 proteins were essential for proper mitochondrial architecture and establishment of the annulus, a ring-like structure in the tail region of sperm. In addition, Sept4 mutant sperm showed defects in the elimination of residual cytoplasm during sperm maturation and had increased staining for the caspase inhibitor XIAP. This is consistent with a role of the proapoptotic Sept4 protein ARTS in promoting caspase-mediated removal of cytoplasm via inhibition of XIAP. Our results indicate that Sept4 proteins play distinct but evolutionarily conserved functions in different cellular compartments.