The vertebrate Polycomb Group (PcG) genes encode proteins that form large multimeric and chromatin-associated complexes implicated in the stable repression of developmentally essential genes. Rnf110 and Phc2 are shown to be components of mammalian PcG multimeric complexes in HeLa cells. Here we report defects in Peyer's patch (PP) development in Rnf110 mutant mice, which is synergically exaggerated by Phc2 mutation. PP development involves a series of inductive interactions and subsequent differentiation and proliferation between lymphoid and mesenchymal cells in late gestational stage. Rnf110 and Phc2 mutations impair development of PP anlagen by affecting proliferation of lymphoid lineage cells populated in PP anlagen in gene-dosage dependent manner. We suggest that PcG complexes may act to mediate certain inductive signals maybe through IL-7Ralpha to allow sufficient proliferation of lymphoid inducer cells during PP organogenesis.