FRAXE mental retardation results from expansion and methylation of a CCG trinucleotide repeat located in exon 1 of the X-linked FMR2 gene, which results in transcriptional silencing. The product of FMR2 is a member of a family of proteins rich in serine and proline, members of which have been associated with transcriptional activation. We have developed a murine Fmr2 gene knock-out model by replacing a fragment containing parts of exon 1 and intron 1 with the Escherichia coli lacZ gene, placing lacZ under control of the Fmr2 promoter. Expression of lacZ in the knock-out animals indicates that Fmr2 is expressed in several tissues, including brain, bone, cartilage, hair follicles, lung, tongue, tendons, salivary glands, and major blood vessels. In the CNS, Fmr2 expression begins at the time that cells in the neuroepithelium differentiate into neuroblasts. Mice lacking Fmr2 showed a delay-dependent conditioned fear impairment. Long-term potentiation (LTP) was found to be enhanced in hippocampal slices of Fmr2 knock-out compared with wild-type littermates. To our knowledge, this mouse knock-out is the first example of an animal model of human mental retardation with impaired learning and memory performance and increased LTP. Thus, although a number of studies have suggested that diminished LTP is associated with memory impairment, our data suggest that increased LTP may be a mechanism that leads to impaired cognitive processing as well.