The fly morphogen Hedgehog (Hh) and its mammalian orthologs, Sonic, Indian, and Desert hedgehog, are secreted signaling molecules that mediate tissue patterning during embryogenesis and function in tissue homeostasis and regeneration in the adult. The function of all Hh family members is regulated at the levels of morphogen multimerization on the surface of producing cells, multimer release, multimer diffusion to target cells, and signal reception. These mechanisms are all known to depend on interactions of positively charged Hh amino acids (the Cardin-Weintraub (CW) motif) with negatively charged heparan sulfate (HS) glycosaminoglycan chains. However, a precise mechanistic understanding of these interactions is still lacking. In this work, we characterized ionic HS interactions of multimeric Sonic hedgehog (called ShhNp) as well as mutant forms lacking one or more CW residues. We found that deletion of all five CW residues as well as site-directed mutagenesis of CW residues Lys(33), Arg(35), and Lys(39) (mouse nomenclature) abolished HS binding. In contrast, CW residues Arg(34) and Lys(38) did not contribute to HS binding. Analysis and validation of Shh crystal lattice contacts provided an explanation for this finding. We demonstrate that CW residues Arg(34) and Lys(38) make contact with an acidic groove on the adjacent molecule in the multimer, suggesting a new function of these residues in ShhNp multimerization rather than HS binding. Therefore, the recombinant monomeric morphogen (called ShhN) differs in CW-dependent HS binding and biological activity from physiologically relevant ShhNp multimers, providing new explanations for functional differences observed between ShhN and ShhNp.