Dmrt2 is expressed in the dermomyotome of developing vertebrate somites. To determine the role of Dmrt2 during mouse embryonic development, we generated a null mutation of Dmrt2 via homologous recombination in embryonic stem cells. Dmrt2 heterozygous mice derived from these cells are phenotypically normal. However, Dmrt2 homozygotes die soon after birth. The cause of death is likely due to abnormal rib and sternal development, leading to an inability to breathe. Loss of Dmrt2 leads to embryonic somite patterning defects, first evidenced at embryonic day (E) 10.5 and more pronounced by E11.5. Notably, both the dermomyotome and myotome fail to adopt a normal epithelial morphology in the absence of Dmrt2. Accompanying these morphological defects are alterations in the expression patterns of dermomyotomal and myotomal transcription factors including Pax3, Paraxis, Myf5, myogenin, Mrf4 and MyoD. Despite these defects, embryos harvested from E13.5 onwards exhibited relatively normal muscle pattern and mass, suggesting that early myotomal defects are corrected by a Dmrt2-independent mechanism. Taken together, our results define an essential function for Dmrt2 in somite development and provide evidence that DM domain genes have been co-opted into other critical developmental pathways distinct from that of sex determination or differentiation.