EDD is the mammalian ortholog of the Drosophila melanogaster hyperplastic disc gene (hyd), which is critical for cell proliferation and differentiation in flies through regulation of hedgehog and decapentaplegic signaling. Amplification and overexpression of EDD occurs frequently in several cancers, including those of the breast and ovary, and truncating mutations of EDD are also observed in gastric and colon cancer with microsatellite instability. EDD has E3 ubiquitin ligase activity, is involved in regulation of the DNA damage response, and may control hedgehog signaling, but a definitive biological role has yet to be established. To investigate the role of Edd in vivo, gene targeting was used to generate Edd knockout (Edd(Delta/Delta)) mice. While heterozygous mice had normal development and fertility, no viable Edd-deficient embryos were observed beyond E10.5, with delayed growth and development evident from E8.5 onward. Failed yolk sac and allantoic vascular development, along with defective chorioallantoic fusion, were the primary effects of Edd deficiency. These extraembryonic defects presumably compromised fetal-maternal circulation and hence efficient exchange of nutrients and oxygen between the embryo and maternal environment, leading to a general failure of embryonic cell proliferation and widespread apoptosis. Hence, Edd has an essential role in extraembryonic development.