Mice lacking histone deacetylase 9 (HDAC9) and its truncated variant, HDRP, exhibit post-axial polydactyly that manifests as an extra big toe on the right hind foot. Polydactyly in HDAC9/ HDRP knockout mice occurs with incomplete penetrance and affects both genders similarly. Because polydactyly can result from overactivity of sonic hedgehog (Shh) signaling, we investigated whether HDRP acted as a negative regulator of the Shh pathway. We find that Gli1, a transcription factor and downstream mediator of Shh signaling, is expressed at substantially higher levels in the feet of perinatal HDAC9/ HDRP−/− mice as compared with wild-type littermates. To more directly examine whether HDRP negatively-regulates Shh signaling we utilized cell lines that express components of the Shh pathway and that respond to the Shh agonist purmorphamine. We find that purmorphamine-mediated stimulation of Gli1 in the NIH 3T3 and HT22 cell lines is inhibited by the expression of HDRP. In HT22 cells, purmorphamine treatment leads to an increase in the rate of cell proliferation, which is also inhibited by HDRP. This inhibitory effect of HDRP on purmorphamine-mediated cell proliferation was also observed in primary cultures of glial cells. Although the mechanism by which it inhibits Gli1 induction and cell proliferation by purmorphamine is not clear, HDRP localizes to the nucleus suggesting it acts just upstream of Gli3 activation in the signaling cascade activated by Shh. Taken together our results suggest that HDRP acts as a negative regulator of the Shh pathway and that the absence of HDRP results in hyper-activation of this pathway resulting in polydactyly.