Purkinje cells of the developing cerebellum secrete the morphogen sonic hedgehog (SHH), which is required to maintain the proliferative state of granule cell precursors (GCPs) prior to their differentiation and migration to form the internal granule layer (IGL). Despite a wealth of knowledge regarding the function of SHH during cerebellar development, the upstream regulators of Shh expression during this process remain largely unknown. Here we report that the murine short stature homeobox 2 (Shox2) gene is required for normal Shh expression in dorsal-residing Purkinje cells. Using two different Cre drivers, we show that elimination of Shox2 in the brain results in developmental defects in the inferior colliculus and cerebellum. Specifically, loss of Shox2 in the cerebellum results in precocious differentiation and migration of GCPs from the external granule layer (EGL) to the IGL. This correlates with premature bone morphogenetic protein 4 (Bmp4) expression in granule cells of the dorsal cerebellum. The size of the neonatal cerebellum is reduced in Shox2-mutant animals, which is consistent with a reduction in the number of GCPs present in the EGL, and could account for the smaller vermis and thinner IGL present in adult Shox2mutants. Shox2-mutant mice also display reduced exploratory activity, altered gait and impaired motor coordination. Our findings are the first to show a role for Shox2 in brain development. We provide evidence that Shox2 plays an important role during cerebellar development, perhaps to maintain the proper balance of Shh and Bmp expression levels in the dorsal vermis, and demonstrate that in the absence of Shox2, mice display both cerebellar impairments and deficits in motor coordination, ultimately highlighting the importance of Shox2 in the cerebellum.