The stromal compartment of the bone marrow is composed of various cell types that provide trophic and instructive signals for hematopoiesis. The mesenchymal stem cell is believed to give rise to all major cellular components of the bone marrow microenvironment. Nemo-like kinase, Nlk, is a serine-threonine kinase that connects MAP kinase and Wnt signaling pathways; its in vivo function in mouse is unknown. We have generated mice with a targeted disruption of Nlk and find that the complex phenotype significantly varies with the genetic background. Whereas C57BL/6 mice lacking Nlk die during the third trimester of pregnancy, the 129/Sv background supports survival into adolescence; such mice are growth retarded and suffer from various neurological abnormalities. We show here that the Nlk deficiency syndrome includes aberrant differentiation of bone marrow stromal cells. Varying degrees of morphological abnormality, such as increased numbers of adipocytes, large blood sinuses and absence of bone-lining cells are observed in the bone marrow of mutant mice. Nlk deficient mice thus provide a novel model to study the genetic requirements for bone marrow stromal differentiation.