Fibroblast growth factors (FGFs) transduce signals through FGF receptors (FGFRs) and have pleiotropic functions. Besides signal-transducing FGFRs, cysteine-rich FGF receptor (Cfr; Glg1) is also known to bind some FGFs, although its physiological functions remain unknown. In this study, we generated Cfr-deficient mice and found that some of them die perinatally, and show growth retardation, tail malformation and cleft palate. These phenotypes are strikingly similar to those of Fgf18-deficient mice, and we revealed interaction between Cfr and Fgf18 both genetically and physically, suggesting functional cooperation. Consistently, introduction of Cfr facilitated Fgf18-dependent proliferation of Ba/F3 cells expressing Fgfr3c. In addition, we uncovered binding between Cfr and delta-like protein (Dlk), and noticed that Cfr-deficient mice are also similar to Dlk-transgenic mice, indicating that Cfr and Dlk function in opposite ways. Interestingly, we also found that Dlk interrupts the binding between Cfr and Fgf18. Thus, the Fgf18 signaling pathway seems to be finely tuned by Cfr and Dlk for skeletal development. This study reveals a novel regulatory mechanism for Fgf18 signaling involving Cfr and Dlk.