We have engineered a mouse mutation that specifically deletes most of the RXR alpha N-terminal A/B region, which includes the activation function AF-1 and several phosphorylation sites. The homozygous mutants (RXR alpha af1(o)), as well as compound mutants that further lack RXR beta and RXR gamma, are viable and display a subset of the abnormalities previously described in RXR alpha-null mutants. In contrast, RXR alpha af1(o)/RAR(-/-)(alpha, beta or gamma) compound mutants die in utero and exhibit a large array of malformations that nearly recapitulate the full spectrum of the defects that characterize the fetal vitamin A-deficiency (VAD) syndrome. Altogether, these observations indicate that the RXR alpha AF-1 region A/B is functionally important, although less so than the ligand-dependent activation function AF-2, for efficiently transducing the retinoid signal through RAR/RXR alpha heterodimers during embryonic development. Moreover, it has a unique role in retinoic acid-dependent involution of the interdigital mesenchyme. During early placentogenesis, both the AF-1 and AF-2 activities of RXR alpha, beta and gamma appear to be dispensable, suggesting that RXRs act as silent heterodimeric partners in this process. However, AF-2 of RXR alpha, but not AF-1, is required for differentiation of labyrinthine trophoblast cells, a late step in the formation of the placental barrier.