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CXCR4 regulates cell proliferation, enhances cell survival and induces chemotaxis, yet molecular mechanisms underlying its signaling remain elusive. Like all other G-protein coupled receptors (GPCRs), CXCR4 delivers signals through G-protein-dependent and -independent pathways, the latter involving its serine-rich cytoplasmic tail. To evaluate the signaling and biological contribution of this G-protein-independent pathway, we generated mutant mice that express cytoplasmic tail-truncated CXCR4 (ΔT) by a gene knock-in approach. We found that ΔT mice exhibited multiple developmental defects, with not only G-protein-independent but also G-protein-dependent signaling events completely abolished, despite ΔT's ability to still associate with G-proteins. These results reveal an essential positive regulatory role of the cytoplasmic tail in CXCR4 signaling and suggest the tail is crucial for mediating G-protein activation and initiating crosstalk between G-protein-dependent and G-protein-independent pathways for correct GPCR signaling.