We studied three patients with severe skeletal dysplasia, T cell immunodeficiency, and developmental delay. Whole-exome sequencing revealed homozygous missense mutations affecting exostosin-like 3 (EXTL3), a glycosyltransferase involved in heparan sulfate (HS) biosynthesis. Patient-derived fibroblasts showed abnormal HS composition and altered fibroblast growth factor 2 signaling, which was rescued by overexpression of wild-type EXTL3 cDNA. Interleukin-2–mediated STAT5 phosphorylation in patients’ lymphocytes was markedly reduced. Interbreeding of the extl3-mutant zebrafish (box) with Tg(rag2:green fluorescent protein) transgenic zebrafish revealed defective thymopoiesis, which was rescued by injection of wild-type human EXTL3 RNA. Targeted differentiation of patient-derived induced pluripotent stem cells showed a reduced expansion of lymphohematopoietic progenitor cells and defects of thymic epithelial progenitor cell differentiation. These data identify EXTL3 mutations as a novel cause of severe immune deficiency with skeletal dysplasia and developmental delay and underline a crucial role of HS in thymopoiesis and skeletal and brain development.