Loss-of-function mutations in the human ERG1 potassium channel (hERG1) frequently underlie the long QT2 (LQT2) syndrome. The role of the ERG potassium channel in cardiac development was elaborated in an in vivo model of a homozygous, loss-of-function LQT2 syndrome mutation. The hERG N629D mutation was introduced into the orthologous mouse gene, mERG, by homologous recombination in mouse embryonic stem cells. Intact homozygous embryos showed abrupt cessation of the heart beat. N629D/N629D embryos die in utero by embryonic day 11.5. Their developmental defects include altered looping architecture, poorly developed bulbus cordis, and distorted aortic sac and branchial arches. N629D/N629D myocytes from embryonic day 9.5 embryos manifested complete loss of I_Kr function, depolarized resting potential, prolonged action potential duration (LQT), failure to repolarize, and propensity to oscillatory arrhythmias. N629D/N629D myocytes manifest calcium oscillations and increased sarcoplasmic reticulum Ca⁺² content. Although the N629D/N629D protein is synthesized, it is mainly located intracellularly, whereas +/+ mERG protein is mainly in plasmalemma. N629D/N629D embryos show robust apoptosis in craniofacial regions, particularly in the first branchial arch and, to a lesser extent, in the cardiac outflow tract. Because deletion of Hand2 produces apoptosis, in similar regions and with a similar final developmental phenotype, Hand2 expression was evaluated. Robust decrease in Hand2 expression was observed in the secondary heart field in N629D/N629D embryos. In conclusion, loss of I_Kr function in N629D/N629D cardiovascular system leads to defects in cardiac ontogeny in the first branchial arch, outflow tract, and the right ventricle.