Expression of HNF-4, a transcription factor in the steroid hormone receptor superfamily, is detected only in the visceral endoderm of mouse embryos during gastrulation and is expressed in certain embryonic tissues from 8.5 days of gestation. To examine the role of HNF-4 during embryonic development, we disrupted the gene in embryonic stem cells and found that the homozygous loss of functional HNF-4 protein was an embryonic lethal. Cell death was evident in the embryonic ectoderm at 6.5 days when these cells normally initiate gastrulation. As assessed by expression of Brachyury and HNF-3 beta, primitive streak formation and initial differentiation of mesoderm do occur, but with a delay of approximately 24 h. Development of embryonic structures is severely impaired. These results demonstrate that the expression of HNF-4 in the visceral endoderm is essential for embryonic ectoderm survival and normal gastrulation.