Holoprosencephaly (HPE), a common human congenital anomaly defined by a failure to delineate the midline of the forebrain and/or midface, is associated with diminished Sonic hedgehog (SHH)-pathway activity in development of these structures. SHH signaling is regulated by a network of ligand-binding factors, including the primary receptor PTCH1 and the putative coreceptors, CDON (also called CDO), BOC, and GAS1. Although binding of SHH to these receptors promotes pathway activity, it is not known whether interactions between these receptors are important. We report here identification of missense CDON mutations in human HPE. These mutations diminish CDON's ability to support SHH-dependent gene expression in cell-based signaling assays. The mutations occur outside the SHH-binding domain of CDON, and the encoded variant CDON proteins do not display defects in binding to SHH. In contrast, wild-type CDON associates with PTCH1 and GAS1, but the variants do so inefficiently, in a manner that parallels their activity in cell-based assays. Our findings argue that CDON must associate with both ligand and other hedgehog-receptor components, particularly PTCH1, for signaling to occur and that disruption of the latter interactions is a mechanism of HPE.