Glycine decarboxylase (GLDC) acts in the glycine cleavage system to decarboxylate glycine and transfer a one-carbon unit into folate one-carbon metabolism. GLDC mutations cause a rare recessive disease non-ketotic hyperglycinemia (NKH). Mutations have also been identified in patients with neural tube defects (NTDs); however, the relationship between NKH and NTDs is unclear. We show that reduced expression of Gldc in mice suppresses glycine cleavage system activity and causes two distinct disease phenotypes. Mutant embryos develop partially penetrant NTDs while surviving mice exhibit post-natal features of NKH including glycine accumulation, early lethality and hydrocephalus. In addition to elevated glycine, Gldc disruption also results in abnormal tissue folate profiles, with depletion of one-carbon-carrying folates, as well as growth retardation and reduced cellular proliferation. Formate treatment normalizes the folate profile, restores embryonic growth and prevents NTDs, suggesting that Gldc deficiency causes NTDs through limiting supply of one-carbon units from mitochondrial folate metabolism.