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Background: In eukaryotic cells, DNA polymerase delta (Poldelta), whose catalytic subunit p125 is encoded in the Pold1 gene, plays a central role in chromosomal DNA replication, repair, and recombination. However, the physiological role of the Poldelta in mammalian development has not been thoroughly investigated., Methodology/principal Findings: To examine this role, we used a gene targeting strategy to generate two kinds of Pold1 mutant mice: Poldelta-null (Pold1(-/-)) mice and D400A exchanged Poldelta (Pold1(exo/exo)) mice. The D400A exchange caused deficient 3'-5' exonuclease activity in the Poldelta protein. In Poldelta-null mice, heterozygous mice developed normally despite a reduction in Pold1 protein quantity. In contrast, homozygous Pold1(-/-) mice suffered from peri-implantation lethality. Although Pold1(-/-) blastocysts appeared normal, their in vitro culture showed defects in outgrowth proliferation and DNA synthesis and frequent spontaneous apoptosis, indicating Poldelta participates in DNA replication during mouse embryogenesis. In Pold1(exo/exo) mice, although heterozygous Pold1(exo/+) mice were normal and healthy, Pold1(exo/exo) and Pold1(exo/-) mice suffered from tumorigenesis., Conclusions: These results clearly demonstrate that DNA polymerase delta is essential for mammalian early embryogenesis and that the 3'-5' exonuclease activity of DNA polymerase delta is dispensable for normal development but necessary to suppress tumorigenesis.