The thyroid-specific enhancer-binding protein (T/ebp) gene was disrupted by homologous recombination in embryonic stem cells to generate mice lacking T/EBP expression. Heterozygous animals developed normally, whereas mice homozygous for the disrupted gene were born dead and lacked the lung parenchyma. Instead, they had a rudimentary bronchial tree associated with an abnormal epithelium in their pleural cavities. Furthermore, the homozygous mice had no thyroid gland but had a normal parathyroid. In addition, extensive defects were found in the brain of the homozygous mice, especially in the ventral region of the forebrain. The entire pituitary, including the anterior, intermediate, and posterior pituitary, was also missing. In situ hybridization showed that the T/ebp gene is expressed in the normal thyroid, lung bronchial epithelium, and specific areas of the forebrain during early embryogenesis. These results establish that the expression of T/EBP, a transcription factor known to control thyroid-specific gene transcription, is also essential for organogenesis of the thyroid, lung, ventral forebrain, and pituitary.