ActRIA (or ALK2), one of the type I receptors of the transforming growth factor-beta (TGF-beta) superfamily, can bind both activin and bone morphogenetic proteins (BMPs) in conjunction with the activin and BMP type II receptors, respectively. In mice, ActRIA is expressed primarily in the extraembryonic visceral endoderm before gastrulation and later in both embryonic and extraembryonic cells during gastrulation. To elucidate its function in mouse development, we disrupted the transmembrane domain of ActRIA by gene targeting. We showed that embryos homozygous for the mutation were arrested at the early gastrulation stage, displaying abnormal visceral endoderm morphology and severe disruption of mesoderm formation. To determine in which germ layer ActRIA functions during gastrulation, we performed reciprocal chimera analyses. (1) Homozygous mutant ES cells injected into wild-type blastocysts were able to contribute to all three definitive germ layers in chimeric embryos. However, a high contribution of mutant ES cells in chimeras disrupted normal development at the early somite stage. (2) Consistent with ActRIA expression in the extraembryonic cells, wild-type ES cells failed to rescue the gastrulation defect in chimeras in which the extraembryonic ectoderm and visceral endoderm were derived from homozygous mutant blastocysts. Furthermore, expression of HNF4, a key visceral endoderm-specific transcription regulatory factor, was significantly reduced in the mutant embryos. Together, our results indicate that ActRIA in extraembryonic cells plays a major role in early gastrulation, whereas ActRIA function is also required in embryonic tissues during later development in mice.