OBJECTIVES: Mammalian DNA methyltransferases are essential to re-establish global DNA methylation patterns during implantation, which is critical for transmitting epigenetic information to the next generation. In contrast, the significance of methyl-CpG binding proteins (MBPs) that bind methylated CpG remains almost unknown at this stage. We previously demonstrated that Zbtb38 (also known as CIBZ)-a zinc finger type of MBP-is required for mouse embryonic stem (ES) cell proliferation by positively regulating Nanog expression. However, the physiological function of Zbtb38 in vivo remains unclear. MATERIALS AND METHODS: This study used the Cre-loxP system to generate conditional Zbtb38 knockout mice. Cell proliferation and apoptosis were studied by immunofluorescence staining. Quantitative real-time PCR, immunoblotting and immunofluorescence were performed to investigate the molecular mechanisms. RESULTS: Germline loss of the Zbtb38 single allele resulted in decreased epiblast cell proliferation and increased apoptosis shortly after implantation, leading to early embryonic lethality. Heterozygous loss of Zbtb38 reduced the expression of Nanog, Sox2, and the genes responsible for epiblast proliferation, differentiation, and cell viability. Although this early lethal phenotype, Zbtb38 is dispensable for ES cell establishment and identity. CONCLUSIONS: These findings indicate that Zbtb38 is essential for early embryonic development via the suppression of Nanog and Sox2 expression.