Disruption of mouse Prep1, which codes for a homeodomain transcription factor, leads to embryonic lethality during post-implantation stages. Prep1–/– embryos stop developing after implantation and before anterior visceral endoderm (AVE) formation. In Prep1–/– embryos at E6.5 (onset of gastrulation), the AVE is absent and the proliferating extra-embryonic ectoderm and epiblast, marked by Bmp4 and Oct4, respectively, are reduced in size. At E.7.5, Prep1–/– embryos are small and very delayed, showing no evidence of primitive streak or of differentiated embryonic lineages. Bmp4 is expressed residually, while the reduced number of Oct4-positive cells is constant up to E8.5. At E6.5, Prep1–/– embryos retain a normal mitotic index but show a major increase in cleaved caspase 3 and TUNEL staining, indicating apoptosis. Therefore, the mouse embryo requires Prep1 when undergoing maximal expansion in cell number. Indeed, the phenotype is partially rescued in a p53–/–, but not in a p16–/–, background. Apoptosis is probably due to DNA damage as Atm downregulation exacerbates the phenotype. Despite this early lethal phenotype, Prep1 is not essential for ES cell establishment. A differential embryonic expression pattern underscores the unique function of Prep1 within the Meis-Prep family.