The ATF2 transcription factor is phosphorylated by the stress-activated mitogen-activated protein kinases (MAPKs) JNK and p38. We show that this phosphorylation is essential for ATF2 function in vivo, since a mouse carrying mutations in the critical phosphorylation sites has a strong phenotype identical to that seen upon deletion of the DNA-binding domain. In addition, combining this mutant with a knockout of the ATF2 homolog, ATF7, results in embryonic lethality with severe abnormalities in the developing liver and heart. The mutant fetal liver is characterized by high levels of apoptosis in developing hepatocytes and haematopoietic cells. Furthermore, we observe a significant increase in active p38 due to loss of a negative feedback loop involving the ATF2-dependent transcriptional activation of MAPK phosphatases. In embryonic liver cells, this increase drives apoptosis, since it can be suppressed by chemical inhibition of p38. Our findings demonstrate the importance of finely regulating the activities of MAPKs during development.