Tiam-1 has been implicated in the development of the central nervous system. However, the in vivo function of Tiam-1 has not been fully determined in the developing mouse brain. In this study, we generated Tiam-1 knockout mice using a Tiam-1 gene-trapped embryonic stem cell line. Insertion of a gene trap vector into a genomic site downstream of exon 5 resulted in a mutant allele encoding a truncated protein fused with the β-geo LacZ gene. Primary mouse embryonic fibroblasts lacking Tiam-1 revealed a significant decrease in Rac activity and cell proliferation. In addition, whole-mount embryonic LacZ expression analysis demonstrated that Tiam-1 is specifically expressed in regions of the developing brain, such as the caudal telencephalon and rostral diencephalon. More importantly, mouse embryos deficient in Tiam-1 gene expression displayed a severe defect in embryonic brain development, including neural tube closure defects or a dramatic decrease in brain size. These findings suggest that embryonic Tiam-1 expression plays a critical role during early brain development in mice.