Mutations in GLI3, which encodes a transcription factor of the Hedgehog signaling pathway, cause several developmental anomalies linked to inappropriate tissue patterning. Here, we report a novel missense variant in the fifth zinc finger domain of GLI3 (c.1826G>A; p.(Cys609Tyr)) initially identified in a proband with preaxial polydactyly type IV, developmental delay, sensorineural hearing loss, skeletal, and genitourinary anomalies. Additional family members exhibited various digital anomalies such as preaxial polydactyly, syndactyly, and postaxial polydactyly either in isolation or combined. Functional studies of Cys609Tyr GLI3 in cultured cells showed abnormal GLI3 processing leading to decreased GLI3 repressor production, increased basal transcriptional activity, and submaximal GLI reporter activity with Hedgehog pathway activation, thus demonstrating an intriguing molecular mechanism for this GLI3-related phenotype. Given the complexity of GLI3 post-translational processing and opposing biological functions as a transcriptional activator and repressor, our findings highlight the importance of performing functional studies of presumed GLI3 variants. This family also demonstrates how GLI3 variants are variably expressed.