The Ca(2+)-dependent cell adhesion molecule E-cadherin functions in the establishment and maintenance of epithelial cell morphology during embryogenesis and adulthood. Downregulation or complete shut-down of E-cadherin expression and mutation of the gene are observed during the progression of tumors of epithelial origin (carcinomas) and correlate with the metastatic potential. We have introduced a targeted mutation into the E-cadherin gene by homologous recombination in mouse embryonic stem cells. The mutation removes E-cadherin sequences essential for Ca2+ binding and for adhesive function. These embryonic stem cells were used to generate mice carrying the mutation. Heterozygous mutant animals appear normal and are fertile. However, the homozygous mutation is not compatible with life: E-cadherin -/- embryos show severe abnormalities before implantation. Particularly, the adhesive cells of the morula dissociate shortly after compaction has occurred, and their morphological polarization is then destroyed. Interestingly, the blastomers are still able to form desmosomes and tight junctions at sites of distorted cell-cell contact. Thus, maternal E-cadherin suffices for initial compaction of the morula but not for further preimplantation development to occur.