ADAMTS18 is an orphan member of the ADAMTS family of metalloproteinase. ADAMTS18 mutation has been linked to developmental eye disorders, such as retinal dystrophies and ectopia lentis. Here, we report a new function of ADAMTS18 in modulating the lacrimal gland (LG) branching morphogenesis, and an association with dry eye in mice. Adamts18 mRNA was found to be enriched in the epithelium of branching tips of embryonic (E) LG, but its expression was barely detectable after 2 weeks of birth. Histological analyses of E16.5-E17.5 LG showed that ADAMTS18 deficiency resulted in a significant reduction of epithelial branching in embryonic LG. In vitro culture of E15.5 LG explants showed that the numbers of epithelial buds and branches in Adamts18 knockout (Adamts18) LGs were significantly decreased when compared to those of wild type (Adamts18) LGs after 0 h, 24 h, and 48 h of culture. Increased fibronectin deposition was detected in LG mesenchyme of E16.5 Adamts18 mice. At 14 months of age, Adamts18 mice manifested multiple LG pathological changes, including acinar atrophy and irregular duct ectasis with periductal fibrosis. The tear volume was significantly decreased in Adamts18 mice at 4 months of age, which corresponds to early adulthood in humans.