Mutations in SALL1 lead to the dominant multiorgan congenital anomalies that define Townes-Brocks syndrome (TBS). The majority of these mutations result in premature termination codons that would be predicted to trigger nonsense-mediated decay (NMD) of mutant mRNA and cause haploinsufficiency. Our previous studies using a gene targeted mouse model (Sall1-DeltaZn) suggested that TBS phenotypes are due to expression of a truncated mutant protein, not haploinsufficiency. In this report, we strengthen this hypothesis by showing that expression of the mutant protein alone in transgenic mice is sufficient to cause limb phenotypes that are characteristic of TBS patients. We prove that the same pathogenetic mechanism elucidated in mice is occurring in humans by demonstrating that truncated SALL1 protein is expressed in cells derived from a TBS patient. TBS mutant protein is capable of dominant negative activity that results in ectopic activation of two downstream genes, Nppa and Shox2, in the developing heart and limb. We propose a model for the pathogenesis of TBS in which truncated Sall1 protein causes derepression of Sall-responsive target genes.