The TGF-betas are multifunctional proteins whose activities are believed to be controlled by interaction with the latent TGF-beta binding proteins (LTBPs). In spite of substantial effort, the precise in vivo significance of this interaction remains unknown. To examine the role of the Ltbp-3, we made an Ltbp-3-null mutation in the mouse by gene targeting. Homozygous mutant animals develop cranio-facial malformations by day 10. At 2 mo, there is a pronounced rounding of the cranial vault, extension of the mandible beyond the maxilla, and kyphosis. Histological examination of the skulls from null animals revealed ossification of the synchondroses within 2 wk of birth, in contrast to the wild-type synchondroses, which never ossify. Between 6 and 9 mo of age, mutant animals also develop osteosclerosis and osteoarthritis. The pathological changes of the Ltbp-3-null mice are consistent with perturbed TGF-beta signaling in the skull and long bones. These observations give support to the notion that LTBP-3 is important for the control of TGF-beta action. Moreover, the results provide the first in vivo indication for a role of LTBP in modulating TGF-beta bioavailability.