Multiple Hereditary Exostoses (MHE) is an autosomal dominant skeletal disorder most frequently caused by mutations in the EXT1 gene. MHE affects proper development of endochondral bones, such that all affected individuals present with exostoses adjacent to the growth plate of long bones, while some individuals exhibit additional bone deformities. EXT1 functions as a heparan sulfate (HS) co-polymerase, and when defective causes improper elongation of glycosaminoglycan side chains on core proteins of HS proteoglycans. Although analysis of heterozygous EXT1-deficient mice has failed to reveal any significant gross morphological variations in skeletal development, significant alterations in molecular signaling occur in the developing long bones. Our results indicate that defects in EXT1 and the resulting reduction in HS lead to enhanced Indian Hedgehog diffusion causing an increase in chondrocyte proliferation and delayed hypertrophic differentiation.