The Krüppel-like transcription factors (KLFs) are important regulators of cell proliferation and differentiation in several different organ systems. The mouse Klf7 gene is strongly active in postmitotic neuroblasts of the developing nervous system, and the corresponding protein stimulates transcription of the cyclin-dependent kinase inhibitor p21waf/cip gene. Here we report that loss of KLF7 activity in mice leads to neonatal lethality and a complex phenotype which is associated with deficits in neurite outgrowth and axonal misprojection at selected anatomical locations of the nervous system. Affected axon pathways include those of the olfactory and visual systems, the cerebral cortex, and the hippocampus. In situ hybridizations and immunoblots correlated loss of KLF7 activity in the olfactory epithelium with significant downregulation of the p21waf/cip and p27kip1 genes. Cotransfection experiments extended the last finding by documenting KLF7's ability to transactivate a reporter gene construct driven by the proximal promoter of p27kip1. Consistent with emerging evidence for a role of Cip/Kip proteins in cytoskeletal dynamics, we also documented p21waf/cip and p27kip1 accumulation in the cytoplasm of differentiating olfactory sensory neurons. KLF7 activity might therefore control neuronal morphogenesis in part by optimizing the levels of molecules that promote axon outgrowth.