Nijmegen breakage syndrome (NBS) is a rare autosomal recessive human disease whose clinical features include growth retardation, immunodeficiency, and increased susceptibility to lymphoid malignancies. Cells from NBS patients exhibit gamma-irradiation sensitivity, S-phase checkpoint defects, and genomic instability. Recently, it was demonstrated that this chromosomal breakage syndrome is caused by mutations in the NBS1 gene that result in a total loss of full-length NBS1 expression. Here we report that in contrast to the viability of NBS patients, targeted inactivation of NBS1 in mice leads to early embryonic lethality in utero and is associated with poorly developed embryonic and extraembryonic tissues. Mutant blastocysts showed greatly diminished expansion of the inner cell mass in culture, and this finding suggests that NBS1 mediates essential functions during proliferation in the absence of externally induced damage. Together, our results indicate that the complex phenotypes observed in NBS patients and cell lines may not result from a complete inactivation of NBS1 but may instead result from hypomorphic truncation mutations compatible with cell viability.