Nkx3.1 is a homeobox gene related to Drosophila bagpipe. Nkx3.1 is an early marker of the sclerotome and a subset of vascular smooth muscle cells, and at later stages, this gene is expressed in the prostate, palatine glands, kidney, and restricted regions of the central nervous system. In the present study, we determined the chromosomal localization of Nkx3.1 and examined the function of Nkx3. 1 in vivo by using gene targeting technique. Interestingly, Nkx3.1 mapped to the central region of the mouse chromosome 14 and was linked to Nkx2.6, a murine homolog of Drosophila tinman. Homozygous mutant mice for Nkx3.1 were viable and fertile, and the phenotype was, unexpectedly, confined to the prostate and palatine glands. The homozygous mutant mice exhibited defective branching morphogenesis of the prostate and palatine glands. Moreover, epithelial cells of the mutant prostate and palatine glands showed significant hyperplasia. No abnormalities were detected in the sclerotome, blood vessels, kidney, or brain. These results indicate that Nkx3.1 plays a critical role in epithelial branching and proliferation in the prostate and palatine glands. However, we did not observe prostate cancer in homozygous mutant mice up to 2 years of age. Therefore, involvement of NKX3.1 in carcinogenesis in men needs to be carefully determined by further investigation.