Csk is a novel cytoplasmic protein-tyrosine kinase that has been shown to inactivate members of the Src family of protein-tyrosine kinases in vitro. To examine the function of Csk in vivo, Csk-deficient mouse embryos were generated by gene targeting in embryonic stem cells. These embryos were developmentally arrested at the 10 to 12 somite stage and exhibited growth retardation and necrosis in the neural tissues. The kinase activity of p60c-src, p59fyn, and p53/56lyn in these embryos was greatly enhanced as an apparent consequence of enhanced specific activity. The increase in kinase activity was associated with an increase in tyrosine phosphorylation of several proteins, especially those around 85 and 120 kd. Thus, these results suggest that Csk indeed acts as an indispensable negative regulator of Src family kinases in vivo.