PPM1G is a nuclear localized serine/threonine phosphatase implicated to be a regulator of chromatin remodeling, mRNA splicing, and DNA damage. However, its in vivo function is unknown. Here we show that ppm1g expression is highly enriched in the central nervous system during mouse and zebrafish development. ppm1g^−/− mice were embryonic lethal with incomplete penetrance after E12.5. Rostral defects, including neural tube and craniofacial defects were observed in ppm1g^−/− embryos associated with increased cell death in the neural epithelium. In zebrafish, loss of ppm1g also led to neural defects with aberrant neural marker gene expression. Primary fibroblasts from ppm1g^−/− embryos failed to grow without immortalization while immortalized ppm1g^−/− fibroblasts had increased cell death upon oxidative and genotoxic stress when compared to wild type fibroblasts. Our in vivo and in vitro studies revealed a critical role for PPM1G in normal development and cell survival. Developmental Dynamics 242:1101–1109, 2013. © 2013 Wiley Periodicals, Inc.