The Crumbs family of transmembrane proteins has an important role in the differentiation of the apical membrane domain in various cell types, regulating such processes as epithelial cell polarization. The mammalian Crumbs protein family is composed of three members. Here, we inactivated the mouse Crb2 gene with gene-targeting techniques and found that the protein is crucial for early embryonic development with severe abnormalities appearing in Crb2-deficient embryos at late-gastrulation. Our findings indicate that the primary defect in the mutant embryos is disturbed polarity of the epiblast cells at the primitive streak, which affects epithelial to mesenchymal transition (EMT) during gastrulation, resulting in impaired mesoderm and endoderm formation, and embryonic lethality by embryonic day 12.5. These findings therefore indicate a novel role for the Crumbs family of proteins. Developmental Dynamics 240:2646–2656, 2011. © 2011 Wiley Periodicals, Inc.