IGF-I is a pleiotropic hormone reported to affect linear growth, glucose metabolism, organ homeostasis, and the immune and neurologic systems. In contrast to IGF-II, IGF-I is expressed at low levels embryonically and has been thought to be more important for postnatal growth and development. To investigate the role of IGF-I in normal development we generated mice with an inactive IGF-I gene by homologous recombination in ES cells. Heterozygous mice are healthy and fertile, but they are 10-20% smaller than wild-type littermates and have lower than normal levels of IGF-I. The size reduction is attributable to a decrease in organs and muscle and bone mass. However, all tissues appear histologically normal. At birth homozygous mutant mice (IGF-I-/-) are< 60% body weight of wild type. Greater than 95% of IGF-I-/-pups die perinatally. Histopathology is characterized by underdevelopment of muscle tissue. Lungs of late embryonic and neonates also appeared less organized with ill-defined alveolae. IGF-I appears to be essential for correct embryonic development in mice.