PR-Set7/Set8/KMT5A is the sole enzyme known to catalyze monomethylation of histone H4 lysine 20 (H4K20) and is present only in multicellular organisms that compact a large fraction of their DNA. We found that mouse embryos that are homozygous null mutants for the gene PR-Set7 display early embryonic lethality prior to the eight-cell stage. Death was due to the absence of PR-Set7 catalytic activity, since microinjection of the wild type, but not a catalytically inactive version, into two-cell embryos rescued the phenotype. A lack of PR-Set7 activity resulted not only in depletion of H4K20me1 but also in reduced levels of the H4K20me2/3 marks catalyzed by the Suv4-20h1/h2 enzymes, implying that H4K20me1 may be essential for the function of these enzymes to ensure the dimethylated and trimethylated states. Embryonic stem cells that were inducibly deleted for PR-Set7 passed through an initial G(2)/M phase, but the progeny were defective at the subsequent S and G(2)/M phases, exhibiting a delay in their cell cycle, accumulation at G(2)/M, massive DNA damage, and improper mitotic chromosome condensation. Cell cycle analysis after synchronization indicated that the defects were a consequence of decreased H4K20me1 due to the absence of PR-Set7. Most importantly, the lack of H4K20me1 also resulted in defects in chromosome condensation in interphase nuclei. These results demonstrate the critical role of H4K20 monomethylation in mammals in a developmental context.