To understand the role of twist during mammalian development, we generated twist-null mice. twist-null embryos died at embryonic day 11.5. Their most prominent phenotype was a failure of the cranial neural folds to fuse. Mutant embryos also had defects in head mesenchyme, somites, and limb buds. Chimera analysis suggested that head mesenchyme was required for cranial neural tube closure and that twist acted in a cell-autonomous manner in this tissue. In addition, in the head mesenchyme region of chimeras, twist-null cells were segregated from wild-type cells, and in the forebrain they lacked mesenchymal characteristics. These results suggest that twist regulates the cellular phenotype and behavior of head mesenchyme cells that are essential for the subsequent formation of the cranial neural tube.