Mice homozygous for the c14CoS albino deletion die as neonates as a result of liver dysfunction. Previous mapping studies have associated this defect with a 310-kb fragment encoding the hepatocyte-specific developmental regulation locus (alf/hsdr-1). The gene encoding fumarylacetoacetate hydrolase (Fah), a metabolic enzyme that catalyzes the last step of tyrosine catabolism, also maps to the same deletion interval. To test whether the neonatal defects found in the albino deletion mutants are attributable to loss of Fah, and not to another gene mapping to the deletion, we have generated Fah mutant mice by gene targeting in embryonic stem cells. Fah-deficient mice die within 12 hr after birth from hypoglycemia and liver dysfunction. In addition, the same pattern of altered liver mRNA expression found in the albino deletion mutants was also found in affected animals. We conclude that the neonatal lethal and liver dysfunction phenotype of the alf/hsdr-1 deletion is entirely attributable to loss of Fah.