The axial skeleton develops from the sclerotome, a mesenchymal cell mass derived from the ventral halves of the somites, segmentally repeated units located on either side of the neural tube. Cells from the medial part of the sclerotome form the axial perichondral tube, which gives rise to vertebral bodies and intervertebral discs; the lateral regions of the sclerotome will form the vertebral arches and ribs. Mesenchymal sclerotome cells condense and differentiate into chondrocytes to form a cartilaginous preskeleton that is later replaced by bone tissue. Uncx4.1 is a paired type homeodomain transcription factor expressed in a dynamic pattern in the somite and sclerotome. Here we show that mice homozygous for a targeted mutation of the Uncx4.1 gene die perinatally and exhibit severe malformations of the axial skeleton. Pedicles, transverse processes and proximal ribs, elements derived from the lateral sclerotome, are lacking along the entire length of the vertebral column. The mesenchymal anlagen for these elements are formed initially, but condensation and chondrogenesis do not occur. Hence, Uncx4.1 is required for the maintenance and differentiation of particular elements of the axial skeleton.