Klf4 (formerly GKLF) is a zinc-finger transcription factor expressed in the epithelia of the skin, lungs, gastrointestinal tract and several other organs. In vitro studies have suggested that Klf4 plays an important role in cell proliferation and/or differentiation. Mice homozygous for a null mutation in Klf4 die within 15 hours of birth and show selective perturbation of late-stage differentiation structures in the epidermis, but the function of Klf4 in the gastrointestinal tract has not been investigated. To address this issue, we have generated Klf4^–/– mice by homologous recombination in embryonic stem cells. In this study, we provide the first in vivo evidence that Klf4 is a goblet cell-specific differentiation factor in the colon. Klf4^–/– mice exhibit normal cell proliferation and cell death rates in the colon on postnatal day 1. However, Klf4^–/– mice demonstrate a 90% decrease in the number of goblet cells in the colon, show abnormal expression of the goblet cell-specific marker Muc2 by in situ hybridization, have abnormal staining of the colonic epithelium with Alcian Blue for acidic mucins, and lack normal goblet cell morphology by ultrastructural analysis. All other epithelial cell types are present in the colon of Klf4^–/– mice. In summary, Klf4 plays a crucial role in colonic epithelial cell differentiation in vivo.