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Csx/Nkx2.5 is a vertebrate homeobox gene with a sequence homology to the Drosophila tinman, which is required for the dorsal mesoderm specification. Recently, heterozygous mutations of this gene were found to cause human congenital heart disease (Schott, J.-J., Benson, D. W., Basson, C. T., Pease, W., Silberbach, G. M., Moak, J. P., Maron, B. J., Seidman, C. E. and Seidman, J. G. (1998) Science 281, 108-111). To investigate the functions of Csx/Nkx2.5 in cardiac and extracardiac development in the vertebrate, we have generated and analyzed mutant mice completely null for Csx/Nkx2.5. Homozygous null embryos showed arrest of cardiac development after looping and poor development of blood vessels. Moreover, there were severe defects in vascular formation and hematopoiesis in the mutant yolk sac. Interestingly, TUNEL staining and PCNA staining showed neither enhanced apoptosis nor reduced cell proliferation in the mutant myocardium. In situ hybridization studies demonstrated that, among 20 candidate genes examined, expression of ANF, BNP, MLC2V, N-myc, MEF2C, HAND1 and Msx2 was disturbed in the mutant heart. Moreover, in the heart of adult chimeric mice generated from Csx/Nkx2.5 null ES cells, there were almost no ES cell-derived cardiac myocytes, while there were substantial contributions of Csx /Nkx2.5-deficient cells in other organs. Whole-mount β-gal staining of chimeric embryos showed that more than 20% contribution of Csx/Nkx2.5-deficient cells in the heart arrested cardiac development. These results indicate that (1) the complete null mutation of Csx/Nkx2.5 did not abolish initial heart looping, (2) there was no enhanced apoptosis or defective cell cycle entry in Csx/Nkx2.5 null cardiac myocytes, (3) Csx/Nkx2.5 regulates expression of several essential transcription factors in the developing heart, (4) Csx/Nkx2.5 is required for later differentiation of cardiac myocytes, (5) Csx/Nkx2.5 null cells exert dominant interfering effects on cardiac development, and (6) there were severe defects in yolk sac angiogenesis and hematopoiesis in the Csx/Nkx2.5 null embryos.