Prdm1/Blimp-1 is a master regulator of gene expression in diverse tissues of the developing embryo and adult organism. Its C-terminal zinc finger domain mediates nuclear import, DNA binding, and recruitment of the corepressors G9a and HDAC1/2. Alternatively spliced transcripts lacking exon 7 sequences encode a structurally divergent isoform (Blimp-1Δexon7) predicted to have distinct functions. Here we demonstrate that the short Blimp-1Δexon7 isoform lacks DNA binding activity and fails to bind G9a or HDAC1/2 but retains the ability to interact with PRMT5. To investigate functional roles of alternative splicing in vivo, we engineered novel mouse strains via embryonic stem (ES) cell technology. Like null mutants, embryos carrying a targeted deletion of exon 7 and exclusively expressing Blimp-1Δexon7 die at around embryonic day 10.5 (E10.5) due to placental defects. In heterozygous Δexon7 mice, there is no evidence of dominant-negative effects. Mice carrying a knock-in allele with an exon 6-exon 7 fusion express full-length Blimp-1 only, develop normally, are healthy and fertile as adults, and efficiently generate mature plasma cells. These findings strongly suggest that the short Blimp-1Δexon7 isoform is dispensable. We propose that developmentally regulated alternative splicing is influenced by chromatin structure at the locus and fine-tunes Blimp-1's functional capabilities.