Morphogenesis of the mammalian forebrain is influenced by the patterning activity of signals emanating from the anterior mesendoderm. In this study, we show that procollagen IIA (IIA), an isoform of the cartilage extracellular matrix protein encoded by an alternatively spliced transcript of Col2a1, is expressed in the prechordal plate and the anterior definitive endoderm. In the absence of IIA activity, the null mutants displayed a partially penetrant phenotype of loss of head tissues, holoprosencephaly, and loss of mid-facial structures, which is associated with reduced sonic hedgehog (Shh) expression in the prechordal mesoderm. Genetic interaction studies reveal that IIA function in forebrain and face development does not involve bone morphogenetic protein receptor 1A (BMPR1A)-or NODAL-mediated signaling activity.