Cyp26b1 encodes a retinoic acid (RA) metabolizing cytochrome P450 enzyme that is expressed in embryonic tissues undergoing morphogenesis, including the testes. We have generated transgenic mice lacking Cyp26b1 and have observed increased RA levels in embryonic testes. Cyp26b1^−/− germ cells prematurely enter meiosis at embryonic d 13.5 and appear to arrest at pachytene stage. Furthermore, after embryonic d 13.5, a rapid increase in apoptosis is observed in male germ cells derived from Cyp26b1^−/− embryos; germ cells are essentially absent in mutant male neonates. In contrast, testicular somatic cells appear to develop normally in the absence of Cyp26b1. Moreover, ovarian germ and somatic cells appear unaffected by the lack of CYP26B1. We also show that the synthetic retinoid Am580, which is resistant to CYP26 metabolism, induces meiosis of male germ cells in cultured gonads, suggesting that abnormal development of germ cells in the Cyp26b1^−/− testes results from excess RA rather than the absence of CYP26B1-generated metabolites of RA. These results provide evidence that CYP26B1 maintains low levels of RA in the developing testes that blocks entry into meiosis and acts as a survival factor to prevent apoptosis of male germ cells.