Pax7 is a member of the paired box containing gene family. Its expression pattern suggests a function in cephalic neural crest derivatives, skeletal muscle and central nervous system development. To understand the role of Pax7 during mouse embryogenesis, we used the homologous recombination technique in embryonic stem cells and generated Pax7-/- mice. Homozygous animals are born but die shortly afer weaning. They exhibit malformations in facial structures involving the maxilla and nose. Our analysis suggests that the observed phenotype is due to a cephalic neural crest defect. No obvious phenotype could be detected in the central nervous system and skeletal muscle. Functional redundancy between Pax7 and Pax3 is discussed.