CD44 is expressed in various isoforms on numerous cell types and tissues during embryogenesis and in the mature organism. CD44 may also be involved in tumor growth. To study the multiple roles of CD44, we abolished expression of all known isoforms of CD44 in mice by targeting exons encoding the invariant N-terminus region of the molecule. Surprisingly, mice were born in Mendelian ratio without any obvious developmental or neurological deficits. Hematological impairment was evidenced by altered tissue distribution of myeloid progenitors with increased levels of colony-forming unit–granulocyte-macrophage (CFU-GM) in bone marrow and reduced numbers of CFU-GM in spleen. Fetal liver colony-forming unit–spleen and granulocyte colony-stimulating factor mobilization assays, together with reduced CFU-GM in peripheral blood, suggested that progenitor egress from bone marrow was defective. In what was either a compensatory response to CD44 deficiency or an immunoregulatory defect, mice also developed exaggerated granuloma responses to Cryotosporidium parvum infection. Finally, tumor studies showed that SV40-transformed CD44-deficient fibroblasts were highly tumorigenic in nude mice, whereas reintroduction of CD44s expression into these fibroblasts resulted in a dramatic inhibition of tumor growth.