Holoprosencephaly (HPE), the most common developmental defect of the forebrain and midface, is caused by a failure to delineate the midline in these structures. Despite the identification of several HPE genes, its genetic basis is largely unknown. Furthermore, the phenotype of affected individuals is highly variable, even within pedigrees. Facial defects in HPE range from cyclopia and proboscis in severe cases to solitary median maxillary central incisor in individuals with microforms of HPE. Cdon (also known as Cdo), an Ig superfamily member, is a component of a cell surface receptor that positively regulates skeletal myogenesis. Cdon is also highly expressed in the frontonasal and maxillary processes (FNP and MXP, respectively) of the developing mouse embryo, structures that contain signaling centers that pattern the face. We report here that mice homozygous for targeted mutations of Cdon display the hallmark facial defects associated with microforms of HPE. This is the first example of a mouse mutant with this phenotype, and this finding implicates a new family of receptors in development of the facial midline and suggests a potential role for Cdon in the pathogenesis and expressivity of HPE in humans.