cAMP mediates the effects of TSH by regulating thyroid follicular cell proliferation, differentiation, and function. To assess the functional importance of the cAMP response element binding protein (CREB) in thyroid follicular cell regulation in vivo, we targeted the expression of a dominant negative (DN) CREB isoform to the thyroid glands of transgenic mice using a tissue-specific promoter. Transgenic mice exhibited severe growth retardation and primary hypothyroidism. Serum levels of TSH were elevated 8-fold above normal levels, and T4 and T3 levels were low. Histologically, the mutant thyroid glands were characterized by poorly developed follicles that were heterogeneous in size with diminished colloid. Ciliated thyroid epithelial cells were observed in the transgenic thyroid glands, suggesting a failure of follicular cell differentiation. Consistent with this hypothesis, the DN CREB transgene inhibited the expression of an array of genes including thyroglobulin, thyroperoxidase, and the TSH receptor in semiquantitative RT-PCR experiments. Altered expression of the thyroid transcription factors Pax-8, TTF-1, and TTF-2 was also observed. These results demonstrate a critical role for CREB in thyroid growth, differentiation, and function in vivo.