Autosomal-recessive omodysplasia (OMOD1) is a genetic condition characterized by short stature, shortened limbs, and facial dysmorphism. OMOD1 is caused by loss-of-function mutations of glypican 6 (GPC6). In this study, we show that GPC6-null embryos display most of the abnormalities found in OMOD1 patients and that Hedgehog (Hh) signaling is significantly reduced in the long bones of these embryos. The Hh-stimulatory activity of GPC6 was also observed in cultured cells, where this GPC increased the binding of Hh to Patched 1 (Ptc1). Consistent with this, GPC6 interacts with Hh through its core protein and with Ptc1 through its glycosaminoglycan chains. Hh signaling is triggered at the primary cilium. In the absence of Hh, we observed that GPC6 is localized outside of the cilium but moves into the cilium upon the addition of Hh. We conclude that GPC6 stimulates Hh signaling by binding to Hh and Ptc1 at the cilium and increasing the interaction of the receptor and ligand.