Holoprosencephaly (HPE) is a common developmental defect of the forebrain and frequently the midface in humans, with both genetic and environmental causes. HPE has a prevalence of 1:250 during embryogenesis and 1:16,000 newborn infants, and involves incomplete development and septation of midline structures in the central nervous system (CNS) with a broad spectrum of clinical severity. Alobar HPE, the most severe form which is usually incompatible with postnatal life, involves complete failure of division of the forebrain into right and left hemispheres and is characteristically associated with facial anomalies including cyclopia, a primitive nasal structure (proboscis) and/or midfacial clefting. At the mild end of the spectrum, findings may include microcephaly, mild hypotelorism, single maxillary central incisor and other defects (Fig. 1). This phenotypic variability also occurs between affected members of the same family. The molecular basis underlying HPE is not known, although teratogens, non-random chromosomal anomalies and familial forms with autosomal dominant and recessive inheritance have been described. HPE3 on chromosome 7q36 is one of at least four different loci implicated in HPE. Here, we report the identification of human Sonic Hedgehog (SHH) as HPE3-the first known gene to cause HPE. Analyzing 30 autosomal dominant HPE (ADHPE) families, we found five families that segregate different heterozygous SHH mutations. Two of these mutations predict premature termination of the SHH protein, whereas the others alter highly conserved residues in the vicinity of the alpha-helix-1 motif or signal cleavage site.