We have generated a null allele of the mouse Msx1 homeobox gene by insertion of an nlacZ reporter gene into its homeobox. The sensitivity of beta-galactosidase detection permitted us to reveal novel aspects of Msx1 gene expression in heterozygous embryos, in particular in ectoderm and mesoderm during gastrulation, and in migrating neural crest cells. Homozygous mutant mice die at birth with facial defects (see Satokata, I. and Maas, R. (1994) Msx1 deficient mice exhibit cleft palate and abnormalities of craniofacial and tooth development. Nat. Genet. 6, 348-356). To investigate the reason for this limited phenotype, we compared the pattern of Msx1 expression with that of the closely related Msx2 gene in wild type embryos and in Msx1-/- mutants. Notably, whereas the expression of Msx1 and Msx2 overlap in the developing limb, this is not the case in the facial regions most affected in the mutant.