A gene has been characterized that is required for postimplantation mouse development. The gene, designated fug1, was disrupted in embryonic stem cells by the U3Neo gene trap retrovirus, and the disrupted allele was introduced into the germ line. Homozygous mutant embryos arrest at the egg cylinder stage at about embryonic day 6 and are mostly resorbed by day 8.5. The appearance of the proamniotic cavity is delayed, and epiblast cells that surround the cavity are disorganized. fug1 transcripts are undetectable at E6 but are induced throughout the embryo after E6.5. The gene is expressed at low levels in all adult tissues examined, maps to chromosome 15, and is conserved among mammals. The cDNA sequence encodes a protein of 589 amino acids, the first 400 of which are 38% identical to the Saccaromyces cerevisiae RNA1 gene. Regions of greatest similarity include a long acidic domain and 11 leucine-rich motifs, thought to mediate high affinity protein-protein interactions. These similarities suggest that Fug1 may be required for developmental changes in RNA processing or chromatin structure prior to gastrulation.