Random chemical mutagenesis of the mouse genome can causally connect genes to specific phenotypes. Using this approach, reduced pinna (rep) or microtia, a defect in ear development, was mapped to a small region of mouse chromosome 2. Sequencing of this region established co-segregation of the phenotype (rep) with a mutation in the Prkra gene, which encodes the protein PACT/RAX. Mice homozygous for the mutant Prkra allele had defects not only in ear development but also growth, craniofacial development and ovarian structure. The rep mutation was identified as a missense mutation (Serine 130 to Proline) that did not affect mRNA expression, however the steady state level of RAX protein was significantly lower in the brains of rep mice. The mutant protein, while normal in most biochemical functions, was unable to bind dsRNA. In addition, rep mice displayed altered morphology of the skull that was consistent with a targeted deletion of Prkra showing a contribution of the gene to craniofacial development. These observations identified a specific mutation that reduces steady-state levels of RAX protein and disrupts the dsRNA binding function of the protein, demonstrating the importance of the Prkra gene in various aspects of mouse development.