In Drosophila, the trithorax-group and the Polycomb-group genes are necessary to maintain the expression of the homeobox genes in the appropriate segments. Loss-of-function mutations in those groups of genes lead to misexpression of the homeotic genes resulting in segmental homeotic transformations. Recently, mouse homologues of the Polycomb-group genes were identified including M33, the murine counterpart of Polycomb. In this report, M33 was targeted in mice by homologous recombination in embryonic stem (ES) cells to assess its function during development. Homozygous M33 (−/−) mice show greatly retarded growth, homeotic transformations of the axial skeleton, sternal and limb malformations and a failure to expand in vitro of several cell types including lymphocytes and fibroblasts. In addition, M33 null mutant mice show an aggravation of the skeletal malformations when treated to RA at embryonic day 7.5, leading to the hypothesis that, during development, the M33 gene might play a role in defining access to retinoic acid response elements localised in the regulatory regions of several Hox genes.