Mutations of the PALB2 tumor suppressor gene in humans are associated with hereditary predisposition to breast and also some other cancers. In the present study, we have characterized mice deficient in Palb2. The data show that the Palb2((+/-)) mice are normal and fertile, and lack macroscopic tumors when followed up till the age of 8 months. Homozygous (HO) Palb2((-/-)) mice present with embryonic lethality and die at E9.5 at the latest. The mutant embryos are smaller in size, developmentally retarded and display defective mesoderm differentiation after gastrulation. In Palb2((-/-)) embryos, the expression of cyclin-dependent kinase inhibitor p21 is increased, and Palb2((-/-)) blastocysts show a growth defect in vitro. Hence, the phenotype of the Palb2((-/-)) mice in many regards resembles those previously reported for Brca1 and Brca2 knockout mice. The similarity in the phenotypes between Palb2, Brca1 and Brca2 knockout mice further supports the functional relationship shown in vitro for these three proteins. Accordingly, our data in vivo suggest that a key function for PALB2 is to interact with and to build up appropriate communication between BRCA1 and BRCA2, thereby licensing the successful performance of the physiological tasks mediated by these two proteins, particularly in homologous recombination and in proper DNA damage response signaling.