Dyskerin is a component of small nucleolar ribonucleoprotein complexes and acts as a pseudouridine synthase to modify newly synthesized ribosomal, spliceosomal, and possibly other RNAs. It is encoded by the DKC1 gene, the gene mutated in X-linked dyskeratosis congenita, and is also part of the telomerase complex. The yeast ortholog, Cbf5, is an essential protein, but in mammals the effect of dyskerin ablation at the cellular level is not known. Here we show that mouse hepatocytes can survive after induction of a Dkc1 deletion. In the absence of dyskerin, rRNA processing is inhibited with the accumulation of large precursors, and fibrillarin does not accumulate in nucleoli. A low rate of apoptosis is induced in the hepatocytes, which show an induction of the p53-dependent cell cycle checkpoint pathway. Signs of liver damage including an increase in serum alanine aminotransferase activity and a disordered structure at the histological and macroscopic levels are observed. In response to carbon tetrachloride administration, when wild-type hepatocytes mount a rapid proliferative response, those without dyskerin do not divide. We conclude that hepatocytes can survive without dyskerin but that the role of dyskerin in RNA modification is essential for cellular proliferation.