RAX was originally discovered as the unique cellular activator for the dsRNA-dependent, interferon-inducible protein kinase PKR. Recent findings indicate that RAX is also a critical component of the RNA-induced silencing complex and a regulator of transcription. Here we report novel phenotypes for both fruit flies carrying a transposon insertion in the 5' UTR of dRax (independently identified as loqs/R3D1) and mice with a deletion of the entire Rax gene. In Drosophila we observe a high level of dRax expression in the developing nerve cord. Mutant fly embryos homozygous for the insertion dRax[f00791] display highly abnormal commissural axon structure of the CNS and 70% of the flies homozygous for the mutant allele die prior to adulthood. Surviving male flies have reduced fertility and female flies are sterile. Furthermore, these flies appear to have a severe defect in nervous system coordination or neuromuscular function resulting in significantly reduced locomotion. Mice were also generated that are heterozygous for a deletion of the entire Rax gene (exons 1-8). While mice that are heterozygous for the mutant allele are viable and appear normal, we are unable to obtain mice homozygous for this mutant allele. Furthermore, we have not observed any embryo obtained by mating heterozygous mice at either E3.5, 7, or 14 that is nullizygous for the Rax gene. Since Rax is expressed in preimplantation blastocysts, these data indicate that deletion of the entire Rax gene is embryonic lethal in mice at a preimplantation stage of development. Collectively, these findings in two different species illustrate the importance of RAX for embryonic development.