Sonic Hedgehog and its GLI transcriptional effectors control foliation complexity during cerebellar morphogenesis by promoting granule cell precursor proliferation. Here, we reveal a novel contribution of Sonic Hedgehog-GLI signaling to cerebellar patterning and cell differentiation by generating mice with targeted deletion of Suppressor of Fused (SuFu), a regulator of Sonic Hedgehog signaling, in the mid-hindbrain. Postnatal SuFu-deficient mice exhibit impaired motor coordination and severe cerebellar mispatterning. SuFu conditional knock-out embryos display abnormal mid-hindbrain morphology associated with misexpression of Fgf8, and delayed differentiation and abnormal migration of major cerebellar cell types. Sonic Hedgehog is ectopically expressed in the external granule layer and Hedgehog signaling is upregulated. While expression of full-length GLI transcriptional activators downstream of Hedgehogs is markedly reduced, a processed form of GLI3, a transcriptional repressor, is essentially lost. Genetic expression of a Gli3 allele encoding GLI3 repressor in SuFu-deficient mice largely rescues abnormal cerebellar patterning and cell differentiation observed in mice with SuFu deficiency alone. Together, our data demonstrate that SuFu controls cerebellar patterning and cell differentiation in a GLI3 repressor-dependent manner.