The vertebrate cranial vault, or calvaria, forms during embryonic development from cranial mesenchyme of multiple embryonic origins. Inductive interactions are thought to specify the number and location of the calvarial bones, including interactions between the neuroepithelium and cranial mesenchyme. An important feature of calvarial development is the local inhibition of osteogenic potential which occurs between specific bones and results in the formation of the cranial sutures. These sutures allow for postnatal growth of the skull to accommodate postnatal increase in brain size. The molecular genetic mechanisms responsible for the patterning of individual calvarial bones and for the specification of the number and location of sutures are poorly understood at the molecular genetic level. Here we report on the function and expression pattern of the LIM-homeodomain gene, lmx1b, during calvarial development. Lmx1b is expressed in the neuroepithelium underlying portions of the developing skull and in cranial mesenchyme which contributes to portions of the cranial vault. Lmx1b is essential for proper patterning and morphogenesis of the calvaria since the supraoccipital and interparietal bones of lmx1b mutant mice are either missing or severely reduced. Moreover, lmx1b mutant mice have severely abnormal sutures between the frontal, parietal, and interparietal bones. Our results indicate that lmx1b is required for multiple events in calvarial development and suggest possible genetic interaction with other genes known to regulate skull development and suture formation.