The DNA-dependent protein kinase (DNA-PK) is a mammalian serine/threonine kinase that is implicated in the repair of DNA double-strand breaks, DNA replication, transcription, and V(D)J recombination. To determine the role of the DNA-binding subunit of DNA-PK in vivo, we targeted Ku80 in mice. In mutant mice, T and B lymphocyte development is arrested at early progenitor stages and there is a profound deficiency in V(D)J rearrangement. Although Ku80-/- mice are viable and reproduce, they are 40-60% of the size of littermate controls. Consistent with this growth defect, fibroblasts derived from Ku80-/- embryos showed an early loss of proliferating cells, a prolonged doubling time, and intact cell-cycle checkpoints that prevented cells with damaged DNA from entering the cell-cycle. The unexpected growth phenotype suggests a new and important link between Ku80 and growth control.