In mammalian embryos, myogenic precursor cells emigrate from the ventral lip of the dermomyotome and colonize the limbs, tongue and diaphragm where they differentiate and form skeletal muscle. Previous studies have shown that Pax3, together with the c-Met receptor tyrosine kinase and its ligand Scatter Factor (SF) are necessary for the migration of hypaxial muscle precursors in mice. Lbx1 and Pax3 are co-expressed in all migrating hypaxial muscle precursors, raising the possibility that Lbx1 regulates their migration. To examine the function of Lbx1 in muscle development, we inactivated the Lbx1 gene by homologous recombination. Mice lacking Lbx1 exhibit an extensive loss of limb muscles, although some forelimb and hindlimb muscles are still present. The pattern of muscle loss suggests that Lbx1 is not required for the specification of particular limb muscles, and the muscle defects that occur in Lbx1(−/−) mice can be solely attributed to changes in muscle precursor migration. c-Met is expressed in Lbx1 mutant mice and limb muscle precursors delaminate from the ventral dermomyotome but fail to migrate laterally into the limb. Muscle precursors still migrate ventrally and give rise to tongue, diaphragm and some limb muscles, demonstrating Lbx1 is necessary for the lateral, but not ventral, migration of hypaxial muscle precursors. These results suggest that Lbx1 regulates responsiveness to a lateral migration signal which emanates from the developing limb.