Thioredoxin reductases (Txnrd) maintain intracellular redox homeostasis in most organisms. Metazoan Txnrds also participate in signal transduction. Mouse embryos homozygous for a targeted null mutation of the txnrd1 gene, encoding the cytosolic thioredoxin reductase, were viable at embryonic day 8.5 (E8.5) but not at E9.5. Histology revealed that txnrd1-/- cells were capable of proliferation and differentiation; however, mutant embryos were smaller than wild-type littermates and failed to gastrulate. In situ marker gene analyses indicated that primitive streak mesoderm did not form. Microarray analyses on E7.5 txnrd-/- and txnrd+/+ littermates showed similar mRNA levels for peroxiredoxins, glutathione reductases, mitochondrial Txnrd2, and most markers of cell proliferation. Conversely, mRNAs encoding sulfiredoxin, IGF-binding protein 1, carbonyl reductase 3, glutamate cysteine ligase, glutathione S-transferases, and metallothioneins were more abundant in mutants. Many gene expression responses mirrored those in thioredoxin reductase 1-null yeast; however, mice exhibited a novel response within the peroxiredoxin catalytic cycle. Thus, whereas yeast induce peroxiredoxin mRNAs in response to thioredoxin reductase disruption, mice induced sulfiredoxin mRNA. In summary, Txnrd1 was required for correct patterning of the early embryo and progression to later development. Conserved responses to Txnrd1 disruption likely allowed proliferation and limited differentiation of the mutant embryo cells.