The retinoblastoma gene, a prototypic tumour-suppressor gene, encodes a nuclear phosphoprotein (Rb). To understand better the role of Rb in development and in tumorigenesis, mice with an insertional mutation in exon 20 of the Rb-1 locus were generated. Homozygous mutants die before the 16th embryonic day with multiple defects. The haematopoietic system is abnormal; there is a significant increase in the number of immature nucleated erythrocytes. In the nervous system, ectopic mitoses and massive cell death are found, particularly in the hindbrain. All spinal ganglion cells die, but the neural retina is unaffected. Transfer of the human retinoblastoma (RB) mini-transgene into the mutant mice corrects the developmental defects. Thus, Rb is essential for normal mouse development.