Rab23 is the product of the gene mutated in the mouse open brain1 phenotype, which displays neural tube defects. It appears to antagonize sonic hedgehog (Shh)-mediated signaling during mouse development, presumably by regulating the intracellular trafficking of one or more of Shh's-signaling components. The Shh receptor Patched1 (Ptch1) and its downstream effector Smoothened (Smo) were initial prime suspects as they are membrane proteins whose cellular dynamics are modulated by the Shh signal. However, Rab23 mutants do not appear to affect the localization and dynamics of either protein. Genetic analyses have now shown that Rab23 functions downstream of Smo and affects the function of the Shh-regulated Gli family of transcription factors in a more direct manner than previously thought. A plethora of proteins that influence Shh signaling and whose cellular trafficking could potentially be regulated by Rab23 has also emerged. These include members of the intraflagellar transport complex, as well as motor proteins responsible for their assembly at the cilia. Rab23 is also expressed in adult mouse neurons and may thus have functions beyond embryonic developmental stages and Shh signaling. We discuss these new findings and explore the myriad of possibilities whereby Rab23 may function.