Using gene trap mutagenesis, we have identified a mutation in mice that causes exencephaly, acrania, facial clefting, and spina bifida, all of which can be attributed to failed neural tube closure. This mutation is designated shroom (shrm) because the neural folds "mushroom" outward and do not converge at the dorsal midline. shrm encodes a PDZ domain protein that is involved at several levels in regulating aspects of cytoarchitecture. First, endogenous Shrm localizes to adherens junctions and the cytoskeleton. Second, ectopically expressed Shrm alters the subcellular distribution of F-actin. Third, Shrm directly binds F-actin. Finally, cytoskeletal polarity within the neuroepithelium is perturbed in mutant embryos. In concert, these observations suggest that Shrm is a critical determinant of the cellular architecture required for proper neurulation.