GROWTH factors are thought to function as pivotal autocrineparacrine regulatory signals during embryonic development1,2. Insulin-like growth factor II (IGF-II), a mitogenic polypeptide for a variety of cell lines3,4, could have such a role, as indicated by the pattern of expression of its gene during rodent development. The IGF-II gene 5-7 uses at least three promoters5,8,9 and expresses several transcripts in many tissues during the embryonic and neonatal periods5,10, whereas expression in adult animals is confined to the choroid plexus and the leptomeninges11. To examine the developmental role of IGF-II, we have begun to study the consequences of introducing mutations at the IGF-II gene locus in the mouse germ line. We have disrupted one of the IGF-II alleles in cultured mouse embryonic stem (ES) cells12-14 by gene targeting15-18 and constructed chimaeric animals. Germ-line transmission of the inactivated IGF-II gene from male chimaeras yielded heterozygous progeny that were smaller than their ES cell-derived wild-type littermates (about 60% of normal body weight). These growth-deficient animals were otherwise apparently normal and fertile. The effect of the mutation was exerted during the embryonic period. These results provide the first direct evidence for a physiological role of IGF-II in embryonic growth. © 1990 Nature Publishing Group.