Implantation within the mammalian uterus elicits dramatic changes in the growth, differentiation, and morphogenesis of the conceptus. This process is interrupted in mice carrying a targeted disruption of the murine evx1 gene, a homolog of the Drosophila even-skipped (eve) gene. Upon implantation, presumptive evx1- homozygotes elicit a decidual response, invade the uterine epithelium, and attach to the basement membrane between uterine stroma and epithelium, but fail to differentiate extraembryonic tissues or to form egg cylinders prior to resorption. Retrograde analysis of embryo genotypes demonstrates that homozygotes could be isolated as free-floating blastocysts but not as gastrulating egg cylinders. Homozygous mutant blastocysts appeared normal and, when grown in vitro, attach, proliferate, and form trophoblastic giant cells surrounding a growing inner cell mass before rapidly degenerating. In situ hybridization analysis demonstrates evx1 gene expression within the visceral endoderm after implantation and prior to gastrulation, at a time in which the mutant phenotype is first detected.