Damage-induced neuronal endopeptidase (DINE) is a metalloprotease belonging to the neprilysin family. Expression of DINE mRNA is observed predominantly in subsets of neurons in the CNS and peripheral nervous system during embryonic development, as well as after axonal injury. However, the physiological function of DINE and its substrate remain unknown. We generated DINE-deficient mice to examine the physiological role of DINE. Shortly after birth, these mice died of respiratory failure resulting from a dysfunction of the diaphragm, which showed severe atrophy. As DINE was abundantly expressed in motor neurons and there was atrophy of the diaphragm, we analyzed the interaction between motor nerves and skeletal muscles in the DINE-deficient mice. Although there were no obvious deficiencies in numbers of motor neurons in the spinal cord or in the nerve trajectories from the spinal cord to the skeletal muscle in DINE-deficient mice, detailed histochemical analysis demonstrated a significant decrease of nerve terminal arborization in the diaphragm from embryonic day 12.5. In accordance with the decrease of final branching, the diaphragms from DINE-deficient mice exhibited only a few neuromuscular junctions. Similar changes in nerve terminal morphology were also apparent in other skeletal muscles, including the latissimus dorsi and the intercostal muscles. These data suggest that DINE is a crucial molecule in distal axonal arborization into muscle to establish neuromuscular junctions.