The discs large (Dlg) protein, or synapse-associated protein 97 (SAP97), is a member of the membrane-associated guanylate kinase family of multidomain scaffolding proteins which recruits transmembrane and signaling molecules to localized plasma membrane sites. Murine dlg is the homologue of the Drosophila dlg tumor suppressor gene. The loss of dlg function in Drosophila disrupts cellular growth control, apicobasal polarity, and cell adhesion of imaginal disc epithelial cells, resulting in embryonic lethality. In this study, we isolated a mutational insertion in the murine dlg locus by gene trapping in totipotent embryonic stem cells. This insertion results in a truncated protein product that contains the N-terminal three PSD-95/DLG/ZO-1 domains of Dlg fused to the LacZ reporter and subsequently lacks the src homology 3 (SH3), protein 4.1 binding, and guanylate kinase (GUK)-like domains. The Dlg-LacZ fusion protein is expressed in epithelial, mesenchymal, neuronal, endothelial, and hematopoietic cells during embryogenesis. Mice homozygous for the dlg mutation exhibit growth retardation in utero, have hypoplasia of the premaxilla and mandible, have a cleft secondary palate, and die perinatally. Consistent with this phenotype, Dlg-LacZ is expressed in mesenchymal and epithelial cells throughout palatal development. Our genetic and phenotypic analysis of dlg mutant mice suggests that protein-protein interactions involving the SH3, protein 4.1 binding, and/or GUK-like domains are essential to the normal function of murine Dlg within craniofacial and palatal morphogenesis.