The transcription factor serum response factor (SRF), a phylogenetically conserved nuclear protein, mediates the rapid transcriptional response to extracellular stimuli, eg growth and differentiation signals. DNA–protein complexes containing SRF or its homologues function as nuclear targets of the Ras/MAPK signalling network, thereby directing gene activities associated with processes as diverse as pheromone signalling, cell-cycle progression (transitions G 0–G 1 and G 2–M), neuronal synaptic transmission and muscle cell differentiation. So far, the activity of mammalian SRF has been studied exclusively in cultured cells. To study SRF function in a multicellular organism we generated an Srf null allele in mice. SRF-deficient embryos (Srf−/−) have a severe gastrulation defect and do not develop to term. They consist of misfolded ectodermal and endodermal cell layers, do not form a primitive streak or any detectable mesodermal cells and fail to express the developmental marker genes Bra (T), Bmp-2/4 and Shh. Activation of the SRF-regulated immediate early genes Egr-1 and c-fos, as well as the α-Actin gene, is severely impaired. Our study identifies SRF as a new and essential regulator of mammalian mesoderm formation. We therefore suggest that in mammals Ras/MAPK signalling contributes to mesoderm induction, as is the case in amphibia.