Lethal congenital contractural syndrome type 2 (LCCS2) is an autosomal recessive neurogenic form of arthrogryposis that is associated with atrophy of the anterior horn of the spinal cord. We previously mapped LCCS2 to 6.4 Mb on chromosome 12q13 and have now narrowed the locus to 4.6 Mb. We show that the disease is caused by aberrant splicing of ERBB3, which leads to a predicted truncated protein. ERBB3 (Her3), an activator of the phosphatidylinositol-3-kinase/Akt pathway—regulating cell survival and vesicle trafficking—is essential for the generation of precursors of Schwann cells that normally accompany peripheral axons of motor neurons. Gain-of-function mutations in members of the epidermal growth-factor tyrosine kinase–receptor family have been associated with predilection to cancer. This is the first report of a human phenotype resulting from loss of function of a member of this group.