Spina bifida (SB) is a complex disorder of failed neural tube closure during the first month of human gestation, with a suspected etiology involving multiple gene and environmental interactions. GPR161 is a ciliary G-protein coupled receptor that regulates Sonic Hedgehog (Shh) signaling. Gpr161 null and hypomorphic mutations cause neural tube defects (NTDs) in mouse models. Herein we show that several genes involved in Shh and Wnt signaling were differentially expressed in the Gpr161 null embryos using RNA-seq analysis. To determine whether there exists an association between GPR161 and SB in humans, we performed direct Sanger sequencing on the GPR161 gene in a cohort of 384 SB patients and 190 healthy controls. We identified six rare variants of GPR161 in six SB cases, of which two of the variants were novel and did not exist in any databases. Both of these variants were predicted to be damaging by SIFT and/or PolyPhen analysis. The novel GPR161 rare variants mislocalized to the primary cilia, dysregulated Shh and Wnt signaling and inhibited cell proliferation in vitro. Our results demonstrate that GPR161 mutations cause NTDs via dysregulation of Shh and Wnt signaling in mice, and novel rare variants of GPR161 can be risk factors for SB in humans.