The X-linked Xist gene encodes a large untranslated RNA that has been implicated in mammalian dosage compensation and in spermatogenesis. To investigate the function of the Xist gene product, we have generated male and female mice that carry a deletion in the structural gene but maintain a functional Xist promoter. Mutant males were healthy and fertile. Females that inherited the mutation from their mothers were also normal and had the wild-type paternal X chromosome inactive in every cell. In contrast to maternal transmission, females that carry the mutation on the paternal X chromosome were severely growth-retarded and died early in embryogenesis. The wild-type maternal X chromosome was inactive in every cell of the growth-retarded embryo proper, whereas both X chromosomes were expressed in the mutant female trophoblast where X inactivation is imprinted. However, an XO mouse with a paternally inherited Xist mutation was healthy and appeared normal. The imprinted lethal phenotype of the mutant females is therefore due to the inability of extraembryonic tissue with two active X chromosomes to sustain the embryo. Our results indicate that the Xist RNA is required for female dosage compensation but plays no role in spermatogenesis.