Mice and cells lacking the epidermal growth factor receptor (EGFR) were generated to examine its physiological role in vivo. Mutant fetuses are retarded in growth and die at mid-gestation in a 129/Sv genetic background, whereas in a 129/Sv x C57BL/6 cross some survive until birth and even to postnatal day 20 in a 129/Sv x C57BL/6 x MF1 background. Death in utero probably results from a defect in the spongiotrophoblast layer of the placenta. Newborn mutant mice have open eyes, rudimentary whiskers, immature lungs, and defects in the epidermis, correlating with the expression pattern of the EGFR as monitored by beta-galactosidase activity, These defects are probably cell-autonomous because chimeric mice generated with EGFR(-/-) embryonic stem cells contribute small amounts of mutant cells to some organs. These results indicate that the EGFR regulates epithelial proliferation and differentiation and that the genetic background influences the resulting phenotype.