Guanylyl cyclase B is the receptor for a small peptide (C-type natriuretic peptide) produced locally in many different tissues. To unravel the functions of the receptor, we generated mice lacking guanylyl cyclase B through gene targeting. Expression of the receptor mRNA in tissues such as bone and female reproductive organs was evident, and significant phenotypes associated with each of these tissues were apparent in null mice. A dramatic impairment of endochondral ossification and an attenuation of longitudinal vertebra or limb-bone growth were seen in null animals. C-type natriuretic peptide-dependent increases of guanylyl cyclase B activity, but not basal enzyme activity, appeared to be required for the progression of endochondral ossification. Female mice were infertile, but male mice were not. This result was due to the failure of the female reproductive tract to develop. Thus, the guanylyl cyclase B receptor is critical for the development of both bone and female reproductive organs.