THE proto-oncogene c-jun is the cellular homologue of v-jun, the transforming oncogene of the avian sarcoma virus 17 (ref. 1). c-jun encodes one major component of the AP-1 transcription fac-tor complex and is expressed in many organs during mouse development and in the adult^2–4. Because of its rapid induction in cells following growth stimulation and the presence of AP-1 binding sites in the promoter regions of many genes, the c-Jun protein is thought to have important functions in cell proliferation and differentiation^2,5–10. But embryonic stem (ES) cells lacking c-Jun are viable and have a normal in vitro differentiation capacity, although c-Jun appears to be important for growth of teratocarcinomas in vivo¹¹. To define the function of c-jun better, targeted ES cells were used to generate mice lacking c-Jun. Here we report that heterozygous mutant mice appear normal, but embryos lacking c-Jun die at mid- to late-gestation and exhibit impaired hepatogenesis, altered fetal liver erythropoiesis and generalized oedema. Interestingly, c-jun-/- ES cells can