Introduction: A cleft palate is a common birth defect in humans with an incidence of 1/500 to 1/1,000 births. It appears to be caused by multiple genetic and environmental factors during palatogenesis. Many molecules are involved in palate formation but the biological mechanisms underlying the normal palate formation and cleft palate are unclear. Accumulating evidence suggests that transforming growth factor $eta$/bone morphogenetic proteins (TGF-$eta$/BMP) family members mediate the epithelial-mesenchymal interactions during palate formation. However, their roles in palatal morphogenesis are not completely understood. Materials and Methods: To understand the roles of TGF-$eta$/BMP signaling in vivo during palatogenesis, mice with a palatal mesenchyme- specific deletion of Smad4, a key intracellular mediator of TGF-$eta$/BMP signaling, were generated and analyzed using the Osr2Ires-Cre mice. Results: The mutant mice were alive at the time of birth with open eyelids and complete cleft palate but died within 24 hours after birth. In skeletal preparation, the horizontal processes of the palatine bones in mutants were not formed and resulted in a complete cleft palate. At E13.5, the palatal shelves of the mutants were growing as normally as those of theirwild type littermates. However, the palatal shelves of the mutants were not elevated at E14.5 in contrast to the elevated palatal shelves of the wild type mice. At E15.5, the palatal shelves of the mutants were elevated over the tongue but did not come in contact with each other, resulting in a cleft palate. Conclusion: These results suggest that mesenchymal Smad4 mediated signaling is essential for the growth of palatal processes and suggests that TGF-$eta$/BMP family members are essential regulators during palate development.