Holoprosencephaly (HPE) is a common birth defect predominantly affecting the forebrain and face and has been linked to mutations in the sonic hedgehog (SHH) gene. HPE is genetically heterogeneous, and clinical presentation represents a spectrum of phenotypes. We have previously shown that Gas1 encodes a cell-autonomous Hedgehog signaling enhancer. Combining cell surface binding, in vitro activity, and explant culture assays, we provide evidence that SHH contains a previously unknown unique binding surface for its interaction with GAS1 and that this surface is also important for maximal signaling activity. Within this surface, the Asn-115 residue of human SHH has been documented to associate with HPE when mutated to lysine (N115K). We provide evidence that HPE associated with this mutation can be mechanistically explained by a severely reduced binding of SHH to GAS1, and we predict a similar result if a mutation were to occur at Tyr-80. Our data should encourage future searches for mutations in GAS1 as possible modifiers contributing to the wide spectrum of HPE.