XRCC4 was identified via a complementation cloning method that employed an ionizing radiation (IR)-sensitive hamster cell line. By gene-targeted mutation, we show that XRCC4 deficiency in primary murine cells causes growth defects, premature senescence, IR sensitivity, and inability to support V(D)J recombination. In mice, XRCC4 deficiency causes late embryonic lethality accompanied by defective lymphogenesis and defective neurogenesis manifested by extensive apoptotic death of newly generated postmitotic neuronal cells. We find similar neuronal developmental defects in embryos that lack DNA ligase IV, an XRCC4-associated protein. Our findings demonstrate that differentiating lymphocytes and neurons strictly require the XRCC4 and DNA ligase IV end-joining proteins and point to the general stage of neuronal development in which these proteins are necessary.