The Wnt-1 (int-1) proto-oncogene, which encodes a putative signaling molecule, is expressed exclusively in the developing central nervous system and adult testes. To examine the role of Wnt-1, we generated six independent embryonic stem cell lines in which insertion of a neoR gene by homologous recombination inactivated a Wnt-1 allele. Germline chimeras were generated from two lines, and progeny from matings between heterozygous parents were examined. In all day 9.5 fetuses homozygous for mutated Wnt-1 alleles, most of the midbrain and some rostral metencephalon were absent. The remainder of the neural tube and all other tissues were normal. In late-gestation homozygotes, there was virtually no midbrain and no cerebellum, while the rest of the fetus was normal. Homozygotes are born, but die within 24 hr. Thus the normal role of Wnt-1 is in determination or subsequent development of a specific region of the central nervous system.