The putative tyrosine phosphatase HD-PTP, encoded by the protein-tyrosine-phosphatase-n23 (Ptpn23) gene, has been described as a tumor suppressor candidate gene. However, its physiological roles and detailed expression profiles are poorly defined. To investigate HD-PTP functions, we generated a mouse model in which the Ptpn23 locus was disrupted by an in-frame insertion of a beta-galactosidase-neomycin-phosphotransferase II (beta-geo) cassette. This insertion leads to the expression of a catalytically inactive truncated protein preserving only the uncharacterized N-terminal BRO1-like domain in fusion with beta-geo under the control of the endogenous promoter. Here we report that homozygous gene deletion is lethal around embryonic day 9.5, suggesting that Ptpn23 is an essential requirement for early stages of embryonic development. Taking advantage of the beta-galactosidase insertion into the Ptpn23 locus, we define the precise Ptpn23 expression pattern by performing X-gal staining at different stages of mouse development. Our results show that Ptpn23 is expressed early during mouse development and that its expression is maintained in adult tissues, markedly in the epithelial cells of many organs.