The transcription factor serum response factor (SRF), a phylogenetically conserved nuclear protein, mediates the rapid transcriptional response to extracellular stimuli, e.g. growth and differentiation signals. DNA- protein complexes containing SRF or its homologues function as nuclear targets of the Ras/MAPK signalling network, thereby directing gene activities associated with processes as diverse as pheromone signalling, cell-cycle progression (transitions G0-G1 and G2-M), neuronal synaptic transmission and muscle cell differentiation. So far, the activity of mammalian SRF has been studied exclusively in cultured cells. To study SRF function in a multicellular organism we generated an Srf null allele in mice. SRF-deficient embryos (Srf -/-) have a severe gastrulation defect and do not develop to term. They consist of misfolded ectodermal and endodermal cell layers, do not form a primitive streak or any detectable mesodermal cells and fail to express the developmental marker genes Bra (T), Bmp-2/4 and Shh. Activation of the SRF-regulated immediate early genes Egr-1 and c-fos, as well as the alpha-Actin gene, is severely impaired. Our study identifies SRF as a new and essential regulator of mammalian mesoderm formation. We therefore suggest that in mammals Ras/MAPK signalling contributes to mesoderm induction, as is the case in amphibia.