The planar cell polarity effector gene Fuz regulates ciliogenesis and Fuz loss of function studies reveal an array of embryonic phenotypes. However, cilia defects can affect many signaling pathways and, in humans, cilia defects underlie several craniofacial anomalies. To address this, we analyzed the craniofacial phenotype and signaling responses of the Fuz(-/-) mice. We demonstrate a unique role for Fuz in regulating both Hedgehog (Hh) and Wnt/β-catenin signaling during craniofacial development. Fuz expression first appears in the dorsal tissues and later in ventral tissues and craniofacial regions during embryonic development coincident with cilia development. The Fuz(-/-) mice exhibit severe craniofacial deformities including anophthalmia, agenesis of the tongue and incisors, a hypoplastic mandible, cleft palate, ossification/skeletal defects and hyperplastic malformed Meckel's cartilage. Hh signaling is down-regulated in the Fuz null mice, while canonical Wnt signaling is up-regulated revealing the antagonistic relationship of these two pathways. Meckel's cartilage is expanded in the Fuz(-/-) mice due to increased cell proliferation associated with the up-regulation of Wnt canonical target genes and decreased non-canonical pathway genes. Interestingly, cilia development was decreased in the mandible mesenchyme of Fuz null mice, suggesting that cilia may antagonize Wnt signaling in this tissue. Furthermore, expression of Fuz decreased expression of Wnt pathway genes as well as a Wnt-dependent reporter. Finally, chromatin IP experiments demonstrate that β-catenin/TCF-binding directly regulates Fuz expression. These data demonstrate a new model for coordination of Hh and Wnt signaling and reveal a Fuz-dependent negative feedback loop controlling Wnt/β-catenin signaling.