The Drosophila porcupine gene is required for secretion of wingless and other Wnt proteins, and sporadic mutations in its unique human ortholog, PORCN, cause a pleiotropic X-linked dominant disorder, focal dermal hypoplasia (FDH, also known as Goltz syndrome). We generated a conditional allele of the X-linked mouse Porcn gene and analyzed its requirement in Wnt signaling and embryonic development. We find that Porcn-deficient cells exhibit a cell-autonomous defect in Wnt ligand secretion but remain responsive to exogenous Wnts. Consistent with the female-specific inheritance pattern of FDH, Porcn hemizygous male embryos arrest during early embryogenesis and fail to generate mesoderm, a phenotype previously associated with loss of Wnt activity. Heterozygous Porcn mutant females exhibit a spectrum of limb, skin, and body patterning abnormalities resembling those observed in human patients with FDH. Many of these defects are recapitulated by ectoderm-specific deletion of Porcn, substantiating a long-standing hypothesis regarding the etiology of human FDH and extending previous studies that have focused on downstream elements of Wnt signaling, such as β-catenin. Conditional deletion of Porcn thus provides an experimental model of FDH, as well as a valuable tool to probe Wnt ligand function in vivo.