Growth is one of the fundamental aspects in the development of an organism. Classical genetic studies have isolated four viable, spontaneous mouse mutants disrupted in growth, leading to dwarfism. Pygmy is unique among these mutants because its phenotype cannot be explained by aberrations in the growth hormone-insulin-like growth factor endocrine pathway. Here we show that the pygmy phenotype arises from the inactivation of Hmgi-c (ref. 6), a member of the Hmgi family which function as architectural factors in the nuclear scaffold and are critical in the assembly of stereospecific transcriptional complexes. Hmgi-c and another Hmgi family member, Hmgi(gamma) (ref. 10), were found to be expressed predominantly during embryogenesis. The HMGI proteins are known to be regulated by cell cycle-dependent phosphorylation which alters their DNA binding affinity. These results demonstrate the important role of HMGI proteins in mammalian growth and development.