A STRIKING example of the relationship between regulation of transcription and phenotype is the central role of the Y-chromo somal gene Sry in mammalian sex determination(1,2). Sry is the founding member of a large family of so-called Sox genes(1,3). During murine embryogenesis, the transcriptional activator Sox-4 is expressed at several sites, hut in adult mice expression is restricted to immature B and T lymphocytes(4). Using targeted genedisruption, we have found that Sox-4(-/-) embryos succumb to circulatory failure at day E14. This was a result of impaired development of the endocardial ridges (a specific site of Sox-4 expression) into the semilunar valves and the outlet portion of the muscular ventricular septum. The observed range of septation defects is known as ’common arterial trunk’ in man. We studied haemopoiesis in lethally irradiated mice reconstituted with Sox-4(-/-) fetal liver cells acid found that a specific block occurred in B-cell development at the pro-B cell stage. In line with this, the frequency and proliferative capacity of IL-7-responsive B cell progenitors in fetal liver were severely decreased in vitro.