Vismodegib (Erivedge) is a first‐in‐class small‐molecule hedgehog pathway inhibitor for the treatment of adults with advanced basal‐cell carcinoma. Because this pathway is known to play key roles in patterning and growth during vertebrate development, vismodegib was anticipated to be embryotoxic. To support marketing applications, an embryofetal development study was completed in which a limited number of pregnant rats (n = 6/group) was administered vismodegib by oral gavage on gestation days 6 to 17. When vismodegib was administered at ≥60 mg/kg/day, doses associated with evidence of pharmacologic activity in previous rat toxicity studies, all conceptuses were resorbed at an early embryonic stage in the absence of significant maternal toxicity. When administered at 10 mg/kg/day, corresponding to an exposure (AUC0–24h) approximately 15% of the median in patients at steady state, a variety of malformations were observed, including absent/fused digits in the hindlimb of multiple fetuses, multiple craniofacial abnormalities in one fetus, and an anorectal defect in one fetus. In addition, the incidence of variations, including dilated renal pelvis or ureter and incompletely or unossified skeletal elements, was significantly greater when compared with the controls. These results confirmed that vismodegib is likely to be embryotoxic at clinically relevant maternal exposures, and doses ≥60 mg/kg/day resulted in a 100% incidence of embryolethality that likely resulted from severe defects in early embryonic development. In contrast, craniofacial defects typically associated with hedgehog pathway inhibition were only observed in one fetus at the low dose of 10 mg/kg/day, which likely reflected minimal or intermittent pathway inhibition at low exposures.