The secondary palate separates the oral from the nasal cavity and its closure during embryonic development is sensitive to genetic perturbations. Mice with deleted Foxf2, encoding a forkhead transcription factor, are born with cleft palate, and an abnormal tongue morphology has been proposed as the underlying cause. Here, we show that Foxf2−/− maxillary explants cultured in vitro, in the absence of tongue and mandible, failed to close the secondary palate. Proliferation and collagen content were decreased in Foxf2−/− palatal shelf mesenchyme. Phosphorylation of Smad2/3 was reduced in mutant palatal shelf, diagnostic of attenuated canonical Tgfβ signaling, whereas phosphorylation of p38 was increased. The amount of Tgfβ2 protein was diminished, whereas the Tgfb2 mRNA level was unaltered. Expression of several genes encoding extracellular proteins important for Tgfβ signaling were reduced in Foxf2−/− palatal shelves: a fibronectin splice-isoform essential for formation of extracellular Tgfβ latency complexes; Tgfbr3 – or betaglycan – which acts as a co-receptor and an extracellular reservoir of Tgfβ; and integrins αV and β1, which are both Tgfβ targets and required for activation of latent Tgfβ. Decreased proliferation and reduced extracellular matrix content are consistent with diminished Tgfβ signaling. We therefore propose that gene expression changes in palatal shelf mesenchyme that lead to reduced Tgfβ signaling contribute to cleft palate in Foxf2−/− mice.