There are numerous genes for which loss-of-function mutations do not produce apparent phenotypes even though statistically significant quantitative changes to biological pathways are observed. To evaluate the biological meaning of small effects is challenging. Bardet-Biedl syndrome (BBS) is a heterogeneous autosomal recessive disorder characterized by obesity, retinopathy, polydactyly, renal malformations, learning disabilities and hypogenitalism, as well as secondary phenotypes including diabetes and hypertension. BBS knockout mice recapitulate most human phenotypes including obesity, retinal degeneration and male infertility. However, BBS knockout mice do not develop polydacyly. Here we showed that the loss of BBS genes in mice result in accumulation of Smoothened and Patched 1 in cilia and have a decreased Shh response. Knockout of Bbs7 combined with a hypomorphic Ift88 allele (orpk as a model for Shh dysfuction) results in embryonic lethality with e12.5 embryos having exencephaly, pericardial edema, cleft palate and abnormal limb development, phenotypes not observed in Bbs7(-/-) mice. Our results indicate that BBS genes modulate Shh pathway activity and interact genetically with the intraflagellar transport (IFT) pathway to play a role in mammalian development. This study illustrates an effective approach to appreciate the biological significance of a small effect.