Mutations in the epithelial morphogen ectodysplasin-A (EDA), a member of the tumor necrosis factor (TNF) family, are responsible for the human disorder X-linked hypohidrotic ectodermal dysplasia (XLHED) characterized by impaired development of hair, eccrine sweat glands, and teeth. EDA-A1 and EDA-A2 are two splice variants of EDA, which bind distinct EDA-A1 and X-linked EDA-A2 receptors. We identified a series of novel EDA mutations in families with XLHED, allowing the identification of the following three functionally important regions in EDA: a C-terminal TNF homology domain, a collagen domain, and a furin protease recognition sequence. Mutations in the TNF homology domain impair binding of both splice variants to their receptors. Mutations in the collagen domain can inhibit multimerization of the TNF homology region, whereas those in the consensus furin recognition sequence prevent proteolytic cleavage of EDA. Finally, a mutation affecting an intron splice donor site is predicted to eliminate specifically the EDA-A1 but not the EDA-A2 splice variant. Thus a proteolytically processed, oligomeric form of EDA-A1 is required in vivo for proper morphogenesis.