Excess exogenous retinoic acid (RA) has been well documented to have teratogenic effects in the limb and craniofacial skeleton. Malformations that have been observed in this context include craniosynostosis, a common developmental defect of the skull that occurs in 1 in 2500 individuals and results from premature fusion of the cranial sutures. Despite these observations, a physiological role for RA during suture formation has not been demonstrated. Here, we present evidence that genetically based alterations in RA signaling interfere with human development. We have identified human null and hypomorphic mutations in the gene encoding the RA-degrading enzyme CYP26B1 that lead to skeletal and craniofacial anomalies, including fusions of long bones, calvarial bone hypoplasia, and craniosynostosis. Analyses of murine embryos exposed to a chemical inhibitor of Cyp26 enzymes and zebrafish lines with mutations in cyp26b1 suggest that the endochondral bone fusions are due to unrestricted chondrogenesis at the presumptive sites of joint formation within cartilaginous templates, whereas craniosynostosis is induced by a defect in osteoblastic differentiation. Ultrastructural analysis, in situ expression studies, and in vitro quantitative RT-PCR experiments of cellular markers of osseous differentiation indicate that the most likely cause for these phenomena is aberrant osteoblast-osteocyte transitioning. This work reveals a physiological role for RA in partitioning skeletal elements and in the maintenance of cranial suture patency.