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<p>Abstract</p> <p>Background</p> <p>Phagocytosis of apoptotic cells is fundamental to animal development, immune function and cellular homeostasis. The phosphatidylserine receptor (Ptdsr) on phagocytes has been implicated in the recognition and engulfment of apoptotic cells and in anti-inflammatory signaling. To determine the biological function of the phosphatidylserine receptor <it>in vivo</it>, we inactivated the <it>Ptdsr </it>gene in the mouse.</p> <p>Results</p> <p>Ablation of <it>Ptdsr </it>function in mice causes perinatal lethality, growth retardation and a delay in terminal differentiation of the kidney, intestine, liver and lungs during embryogenesis. Moreover, eye development can be severely disturbed, ranging from defects in retinal differentiation to complete unilateral or bilateral absence of eyes. <it>Ptdsr </it>^-/- mice with anophthalmia develop novel lesions, with induction of ectopic retinal-pigmented epithelium in nasal cavities. A comprehensive investigation of apoptotic cell clearance <it>in vivo </it>and <it>in vitro </it>demonstrated that engulfment of apoptotic cells was normal in <it>Ptdsr </it>knockout mice, but <it>Ptdsr</it>-deficient macrophages were impaired in pro- and anti-inflammatory cytokine signaling after stimulation with apoptotic cells or with lipopolysaccharide.</p> <p>Conclusion</p> <p><it>Ptdsr </it>is essential for the development and differentiation of multiple organs during embryogenesis but not for apoptotic cell removal. <it>Ptdsr </it>may thus have a novel, unexpected developmental function as an important differentiation-promoting gene. Moreover, Ptdsr is not required for apoptotic cell clearance by macrophages but seems to be necessary for the regulation of macrophage cytokine responses. These results clearly contradict the current view that the phosphatidylserine receptor primarily functions in apoptotic cell clearance.</p>