The transcription factors, MesP1 and MesP2, sharing an almost identical bHLH motif, have an overlapping expression pattern during gastrulation and somitogenesis. Inactivation of the Mesp1 gene results in abnormal heart morphogenesis due to defective migration of heart precursor cells, but somitogenesis is not disrupted because of normal expression of the Mesp2 gene. To understand the cooperative functions of MesP1 and MesP2, either a deletion or sequential gene targeting strategy was employed to inactivate both genes. The double-knockout (dKO) embryos died around 9.5 days postcoitum (dpc) without developing any posterior structures such as heart, somites or gut. The major defect in this double-knockout embryo was the apparent lack of any mesodermal layer between the endoderm and ectoderm. The abnormal accumulation of cells in the primitive streak indicates a defect in the migratory activity of mesodermal cells. Molecular markers employed to characterize the phenotype revealed a lack of the cranio-cardiac and paraxial mesoderm. However, the axial mesoderm, as indicated by brachyury (T) expression, was initially generated but anterior extension was halted after 8.5 dpc. Interestingly, a headfold-like structure developed with right anterior-posterior polarity; however, the embryos lacked any posterior neural properties. The persistent and widely distributed expression of Cerberus-like-1(Cer1), Lim1 and Otx2 in the anterior endoderm might be responsible for the maintenance of anterior neural marker expression. We also performed a chimera analysis to further study the functions of MesP1 and MesP2 in the development of mesodermal derivatives. In the chimeric embryos, dKO cells were scarcely observed in the anterior-cephalic and heart mesoderm, but they did contribute to the formation of the somites, notochord and gut. These results strongly indicate that the defect in the cranial-cardiac mesoderm is cell-autonomous, whereas the defect in the paraxial mesoderm is a non-cell-autonomous secondary consequence.