The expression of skeletal muscle contractile proteins is tightly regulated during embryonic development. In the mouse, the myosin light chain (MLC) 1f/3f gene locus is not activated until E9.5, exclusively in skeletal muscle precursor cells. A potent enhancer downstream of the MLC1f/3f locus confers correct temporal and spatial activation of linked reporter gene in transgenic mouse embryos. To examine roles of the MLC downstream enhancer (MLCE) in its native context of the MLC1f/3f gene locus, we eliminated a 1.5-kb DNA segment containing the enhancer from the mouse genome by targeted deletion, leaving no exogenous sequences at the deletion site. Mouse embryos homozygous for the MLCE deletion were smaller and developmentally delayed, formed no mesoderm by E7.5, and were resorbed almost completely at E8.5. In situ hybridization and RT-PCR analyses of affected mutant embryos at E7.5 revealed ectopic MLC transcripts, whose products would be predicted to interfere with a variety of nonmuscle cell functions determining differentiation of mesoderm. These results suggest that the MLC downstream enhancer and its flanking sequences include negative regulatory elements which block precocious activation of MLC expression in mesodermal precursors during a critical window of development, as well as positive elements which subsequently permit tissue-restricted MLC transcription in differentiating skeletal muscles.