Craniofacial development is orchestrated by transcription factor-driven regulatory networks, epigenetic modifications, and signaling pathways. Signaling molecules and their receptors rely on endo-lysosomal trafficking to prevent accumulation on the plasma membrane. ESCRT (Endosomal Sorting Complexes Required for Transport) machinery is recruited to endosomal membranes enabling degradation of such endosomal cargoes. Studies in vitro and in invertebrate models established the requirements of the ESCRT machinery in membrane remodeling, endosomal trafficking, and lysosomal degradation of activated membrane receptors. However, investigations during vertebrate development have been scarce. By ENU-induced mutagenesis, we isolated a mouse line, Vps25ENU/ENU, carrying a hypomorphic allele of the ESCRT-II component Vps25, with craniofacial anomalies resembling features of human congenital syndromes. Here, we assessed the spatiotemporal dynamics of Vps25 and additional ESCRT-encoding genes during murine development. We show that these genes are ubiquitously expressed although enriched in discrete domains of the craniofacial complex, heart, and limbs. ESCRT-encoding genes, including Vps25, are expressed in both cranial neural crest-derived mesenchyme and epithelium. Unlike constitutive ESCRT mutants, Vps25ENU/ENU embryos display late lethality. They exhibit hypoplastic lower jaw, stunted snout, dysmorphic ear pinnae, and secondary palate clefting. Thus, we provide the first evidence for critical roles of ESCRT-II in craniofacial morphogenesis and report perturbation of NOTCH signaling in craniofacial domains of Vps25ENU/ENU embryos. Given the known roles of NOTCH signaling in the developing cranium, and notably the lower jaw, we propose that the NOTCH pathway partly mediates the craniofacial defects of Vps25ENU/ENU mouse embryos.