Holoprosencephaly (HPE) is a prevalent craniofacial developmental disorder that has both genetic and environmental causes. The gene encoding TG-interacting factor 1 (TGIF1) is among those that are routinely screened in HPE patients. However, the mechanisms by which TGIF1 variants cause HPE are not fully understood. TGIF1 is a transcriptional repressor that limits the output of the Transforming Growth Factor ß (TGFß)/Nodal signaling pathway, and HPE in patients with TGIF1 variants has been suggested to be due to increased Nodal signaling. Mice lacking both Tgif1 and its paralog, Tgif2, have HPE, and embryos lacking Tgif function do not survive past mid-gestation. Here, we show that in the presence of a Nodal heterozygous mutation, proliferation defects are rescued and a proportion of embryos lacking all Tgif function survive to late gestation. However, these embryos have a classic HPE phenotype, suggesting that this is a Nodal-independent effect of Tgif loss of function. Further, we show that the Gli3 gene is a direct target for repression by Tgifs, independent of TGFß/Nodal signaling, consistent with Tgif mutations causing HPE via Nodal-independent effects on the Sonic Hedgehog (Shh) pathway. Based on this work, we propose a model for distinct functions of Tgifs in the Nodal and Shh/Gli3 pathways during forebrain development.