We previously isolated and identified peroxisome proliferator-activated receptor (PPAR)-binding Protein (PBP) as a coactivator for PPARgamma. PBP has recently been identified as a component of the multiprotein complexes such as TRAP, DRIP, and ARC that appear to play an important role in the transcriptional activation by several transcriptional factors including nuclear receptors. To assess the biological significance of PBP, we disrupted the PBP gene (PBP/PPARBP) in mice by homologous recombination. PBP(+/-) mice are healthy, fertile, and do not differ significantly from PBP(+/+) control littermates. PBP null mutation (PBP(-/-)) is embryonically lethal at embryonic day 11.5, suggesting that PBP is an essential gene for mouse embryogenesis. The embryonic lethality is attributed, in part, to defects in the development of placental vasculature similar to those encountered in PPARgamma mutants. Transient transfection assays using fibroblasts isolated from PBP mutant embryos revealed a decreased capacity for ligand-dependent transcriptional activation of PPARgamma as compared with fibroblasts derived form the wild type embryos. These observations suggest that there is no functional redundancy between PBP and other coactivators such as steroid receptor coactivator-1 and that PBP plays a critical role in the signaling of PPARgamma and other nuclear receptors.