Glypican-3 (Gpc3) is a heparan sulfate proteoglycan (HSPG) expressed widely during vertebrate development. Loss-of-function mutations cause Simpson-Golabi-Behmel syndrome (SGBS), a rare and complex congenital overgrowth syndrome with a number of associated developmental abnormalities including congenital heart disease. We found that Gpc3-deficient mice display a high incidence of congenital cardiac malformations like ventricular septal defects, common atrioventricular canal and double outlet right ventricle. In addition we observed coronary artery fistulas, which have not been previously reported in SGBS. Coronary artery fistulas are noteworthy because little is known about the molecular basis of this abnormality. Formation of the coronary vascular plexus in Gpc3-deficient embryos was delayed compared to wild-type, and consistent with GPC3 functioning as a co-receptor for fibroblast growth factor-9 (FGF9), we found a reduction in Sonic Hedgehog (Shh) mRNA expression and signaling in embryonic mutant hearts. Interestingly, we found an asymmetric reduction in SHH signaling in cardiac myocytes, as compared with perivascular cells, resulting in excessive coronary artery formation in the Gpc3-deficient animals. We hypothesize that the excessive development of coronary arteries over veins enables the formation of coronary artery fistulas. This work has broad significance to understanding the genetic basis of coronary development and potentially to molecular mechanisms relevant to revascularization following ischemic injury to the heart.