Transforming acidic coiled-coil-containing (TACC) family members regulate mitotic spindles and have essential roles in embryogenesis. However, the functions of TACC3 in mitosis during mammalian development are not known. We have generated and characterized three mutant alleles of mouse Tacc3 including a conditional allele. Homozygous mutants of a hypomorphic allele exhibited malformations of the axial skeleton. The primary cause of this defect was the failure of mitosis in mesenchymal sclerotome cells. In vitro, 36% of primary mouse embryo fibroblasts (MEF) obtained from mutants homozygous for the hypomorphic allele and 67% of MEF from Tacc3 null mutants failed mitosis. In cloned immortalized MEF, Tacc3 depletion destabilized spindles and prevented chromosomes from aligning properly. Furthermore, chromosome separation and cytokinesis were also severely impaired. Chromosomes were moved randomly and cytokinesis initiated but the cleavage furrow eventually regressed, resulting in binucleate cells that then yielded aneuploid cells in the next cell division. Thus, in addition to spindle assembly, Tacc3 has critical roles in chromosome separation and cytokinesis, and is essential for the mitosis of sclerotome mesenchymal cells during axial formation in mammals.