Glycogen synthase kinase-3 (GSK-3)-alpha and -beta are closely related protein-serine kinases, which act as inhibitory components of Wnt signalling during embryonic development and cell proliferation in adult tissues. Insight into the physiological function of GSK-3 has emerged from genetic analysis in Drosophila, Dictyostelium and yeast. Here we show that disruption of the murine GSK-3beta gene results in embryonic lethality caused by severe liver degeneration during mid-gestation, a phenotype consistent with excessive tumour necrosis factor (TNF) toxicity, as observed in mice lacking genes involved in the activation of the transcription factor activation NF-kappaB. GSK-3beta-deficient embryos were rescued by inhibition of TNF using an anti-TNF-alpha antibody. Fibroblasts from GSK-3beta-deficient embryos were hypersensitive to TNF-alpha and showed reduced NF-kappaB function. Lithium treatment (which inhibits GSK-3; refs 8, 9) sensitized wild-type fibroblasts to TNF and inhibited transactivation of NF-kappaB. The early steps leading to NF-kappaB activation (degradation of I-kappaB and translocation of NF-kappaB to the nucleus) were unaffected by the loss of GSK-3beta, indicating that NF-kappaB is regulated by GSK-3beta at the level of the transcriptional complex. Thus, GSK-3beta facilitates NF-kappaB function.