Mammalian sterile 20-like kinases 1 and 2 (Mst1 and Mst2, respectively) are potent serine/threonine kinases that are involved in cell proliferation and cell death. To investigate the physiological functions of Mst1 and Mst2, we generated Mst1 and Mst2 mutant mice. Mst1−/− and Mst2−/− mice were viable and fertile and developed normally, suggesting possible functional overlaps between the two genes. A characterization of heterozygous and homozygous combinations of Mst1 and Mst2 mutant mice showed that mice containing a single copy of either gene underwent normal organ development; however, Mst1−/−; Mst2−/− mice lacking both Mst1 and Mst2 genes started dying in utero at approximately embryonic day 8.5. Mst1−/−; Mst2−/− mice exhibited severe growth retardation, failed placental development, impaired yolk sac/embryo vascular patterning and primitive hematopoiesis, increased apoptosis in placentas and embryos, and disorganized proliferating cells in the embryo proper. These findings indicate that both Mst1 and Mst2 kinases play essential roles in early mouse development, regulating placental development, vascular patterning, primitive hematopoiesis, and cell proliferation and survival.