MEG2, a protein tyrosine phosphatase with a unique NH2-terminal lipid-binding domain, binds to and is modulated by the polyphosphoinositides PI(4,5)P2 and PI(3,4,5)P3. Recent data implicate MEG2 in vesicle fusion events in leukocytes. Through the genesis of Meg2-deficient mice, we demonstrate that Meg2−/−embryos manifest hemorrhages, neural tube defects including exencephaly and meningomyeloceles, cerebral infarctions, abnormal bone development, and >90% late embryonic lethality. T lymphocytes and platelets isolated from recombination activating gene 2−/− mice transplanted with Meg2−/− embryonic liver–derived hematopoietic progenitor cells showed profound defects in activation that, in T lymphocytes, was attributable to impaired interleukin 2 secretion. Ultrastructural analysis of these lymphocytes revealed near complete absence of mature secretory vesicles. Taken together, these observations suggest that MEG2-mediated modulation of secretory vesicle genesis and function plays an essential role in neural tube, vascular, and bone development as well as activation of mature platelets and lymphocytes.