Using transposon-mediated gene-trap mutagenesis, we have generated a novel mouse mutant termed Blad (Bloated Bladder). Homozygous mutant mice die perinatally showing a greatly distended bladder, underdeveloped diaphragm and a reduction in total skeletal muscle mass. Wild type and heterozygote mice appear normal. Using PCR, we identified a transposon insertion site in the first intron of Nmnat2 (Nicotinamide mononucleotide adenyltransferase 2). Nmnat2 is expressed predominantly in the brain and nervous system and has been linked to the survival of axons. Expression of this gene is undetectable in Nmnat2(blad/blad) mutants. Examination of the brains of E18.5 Nmnat2(blad/blad) mutant embryos did not reveal any obvious morphological changes. In contrast, E18.5 Nmnat2(blad/blad) homozygotes showed an approximate 60% reduction of spinal motoneurons in the lumbar region and a more than 80% reduction in the sensory neurons of the dorsal root ganglion (DRG). In addition, facial motoneuron numbers were severely reduced, and there was virtually a complete absence of axons in the hind limb. Our observations suggest that during embryogenesis, Nmnat2 plays an important role in axonal growth or maintenance. It appears that in the absence of Nmnat2, major target organs and tissues (e.g., muscle) are not functionally innervated resulting in perinatal lethality. In addition, neither Nmnat1 nor 3 can compensate for the loss of Nmnat2. Whilst there have been recent suggestions that Nmnat2 may be an endogenous modulator of axon integrity, this work represents the first in vivo study demonstrating that Nmnat2 is involved in axon development or survival in a mammal.