Background: Mutations in the transcription factor GLI3, a downstream target of Sonic Hedgehog (SHH) signaling, are responsible for the development of malformation syndromes such as Greig-cephalopolysyndactyly-syndrome (GCPS), or Pallister-Hall-syndrome (PHS). Mutations that lead to loss of function of the protein and to haploinsufficiency cause GCPS, while truncating mutations that result in constitutive repressor function of GLI3 lead to PHS. As an exception, some point mutations in the C-terminal part of GLI3 observed in GCPS patients have so far not been linked to loss of function. We have shown recently that protein phosphatase 2A (PP2A) regulates the nuclear localization and transcriptional activity a of GLI3 function. Principal Findings: We have shown recently that protein phosphatase 2A (PP2A) and the ubiquitin ligase MID1 regulate the nuclear localization and transcriptional activity of GLI3. Here we show mapping of the functional interaction between the MID1-a4-PP2A complex and GLI3 to a region between amino acid 568-1100 of GLI3. Furthermore we demonstrate that GCPS-associated point mutations, that are located in that region, lead to misregulation of the nuclear GLI3-localization and transcriptional activity. GLI3 phosphorylation itself however appears independent of its localization and remains untouched by either of the point mutations and by PP2A-activity, which suggests involvement of an as yet unknown GLI3 interaction partner, the phosphorylation status of which is regulated by PP2A activity, in the control of GLI3 subcellular localization and activity. Conclusions: The present findings provide an explanation for the pathogenesis of GCPS in patients carrying C-terminal point mutations, and close the gap in our understanding of how GLI3-genotypes give rise to particular phenotypes. Furthermore, they provide a molecular explanation for the phenotypic overlap between Opitz syndrome patients with dysregulated PP2A-activity and syndromes caused by GLI3-mutations.