The Dlx5 gene encodes a Distal-less-related DNA-binding homeobox protein first expressed during early embryonic development in anterior regions of the mouse embryo. In later developmental stages, it appears in the branchial arches, the otic and olfactory placodes and their derivatives, in restricted brain regions, in all extending appendages and in all developing bones. We have created a null allele of the mouse Dlx5 gene by replacing exons I and II with the E. coli lacZ gene. Heterozygous mice appear normal. β-galactosidase activity in Dlx5^+/− embryos and newborn animals reproduces the known pattern of expression of the gene. Homozygous mutants die shortly after birth with a swollen abdomen. They present a complex phenotype characterised by craniofacial abnormalities affecting derivatives of the first four branchial arches, severe malformations of the vestibular organ, a delayed ossification of the roof of the skull and abnormal osteogenesis. No obvious defect was observed in the patterning of limbs and other appendages. The defects observed in Dlx5^−/− mutant animals suggest multiple and independent roles of this gene in the patterning of the branchial arches, in the morphogenesis of the vestibular organ and in osteoblast differentiation.