Jmjd3 and Utx are demethylases specific for lysine 27 of histone H3. Previous reports indicate that Jmjd3 is essential for differentiation of various cell types, such as macrophages and epidermal cells in mice, whereas Utx is involved in cancer and developmental diseases in humans and mice, as well as Hox regulation in zebrafish and nematodes. Here, we report that Jmjd3, but not Utx, is involved in axial skeletal formation in mice. A Jmjd3 mutant embryo (Jmjd3(Delta 18/Delta 18)), but not a catalytically inactive Utx truncation mutant (Utx(-/y)), showed anterior homeotic transformation. Quantitative RT-PCR and microarray analyses showed reduced Hox expression in both Jmjd3(Delta 18/Delta 18) embryos and tailbuds, whereas levels of Hox activators, such as Wnt signaling factors and retinoic acid synthases, did not decrease, which suggests that Jmjd3 plays a regulatory role in Hox expression during axial patterning. Chromatin immunoprecipitation analyses of embryo tailbud tissue showed trimethylated lysine 27 on histone H3 to be at higher levels at the Hox loci in Jmjd3(Delta 18/Delta 18) mutants compared with wild-type tailbuds. In contrast, trimethylated lysine 4 on histone H3 levels were found to be equivalent in wild-type and Jmjd3(Delta 18/Delta 18) tailbuds. Demethylase-inactive Jmjd3 mutant embryos showed the same phenotype as Jmjd3(Delta 18/Delta 18) mice. These results suggest that the demethylase activity of Jmjd3, but not that of Utx, affects mouse axial patterning in concert with alterations in Hox gene expression.