Histone acetyltransferase 1 is an evolutionarily conserved type B histone acetyltransferase that is thought to be responsible for the diacetylation of newly synthesized histone H4 on lysines 5 and 12 during chromatin assembly. To understand the function of this enzyme in a complex organism, we have constructed a conditional mouse knockout model of Hat1. Murine Hat1 is essential for viability, as homozygous deletion of Hat1 results in neonatal lethality. The lungs of embryos and pups genetically deficient in Hat1 were much less mature upon histological evaluation. The neonatal lethality is due to severe defects in lung development that result in less aeration and respiratory distress. Many of the Hat1(-/-) neonates also display significant craniofacial defects with abnormalities in the bones of the skull and jaw. Hat1(-/-) mouse embryonic fibroblasts (MEFs) are defective in cell proliferation and are sensitive to DNA damaging agents. In addition, the Hat1(-/-) MEFs display a marked increase in genome instability. Analysis of histone dynamics at sites of replication-coupled chromatin assembly demonstrates that Hat1 is not only responsible for the acetylation of newly synthesized histone H4 but is also required to maintain the acetylation of histone H3 on lysines 9, 18, and 27 during replication-coupled chromatin assembly.