Human single-stranded DNA-binding protein 1 (hSSB1), encoded by OBFC2B, was recently characterized as an essential factor for the initiation of DNA damage checkpoints and the maintenance of genomic stability. Here, we report that loss of Obfc2b in mice results in perinatal lethality characterized by growth delay and skeletal abnormalities. These abnormalities are associated with accumulation of γH2ax, apoptosis and defective pre-cartilage condensation, which is essential for normal bone formation. However, deficiency of Obfc2b does not affect the initiation of DNA damage checkpoints, Atm activation, or the maintenance of genomic stability in B lymphocytes and primary fibroblasts. Loss of Obfc2b results in increased expression of its homologue Obfc2a (hSSB2). In contrast to Obfc2b deficiency, depletion of Obfc2a in fibroblasts results in impaired proliferation, accumulation of γH2ax and increased genomic instability. Thus, the hSSB1 orthologue Obfc2b has a unique function during embryogenesis limited to cell types that contribute to bone formation. While being dispensable in most other cell lineages, its absence leads to a compensatory increase in Obfc2a protein, a homologue required for the maintenance of genomic integrity.