Mutations in the gene coding for the transmembrane receptor protein Patched (PTCH) are implicated in the autosomal dominant disorder Gorlin syndrome (also known as naevoid basal cell carcinoma syndrome), characterized by congenital abnormalities and cancer predisposition. Tumour promotion is thought to be associated with aberrant function of PTCH, leading to misregulation of the hedgehog signalling network. However, the transcriptional events that underlie the reduced tumour suppression effects of PTCH have not been studied in detail. We describe a patient with Gorlin syndrome who had three molecular aberrations resulting in biallelic disruption of the PTCH gene, leading to abnormal protein expression and development of basal cell carcinoma. Remarkably, within tumour cells, the somatic nonsense mutation G1019X was associated with activation of a cryptic splice donor site, in which an in-frame deletion of the exon sequence containing the nonsense mutation occurred. However, the function of the resulting PTCH protein variant was still compromised. The pathogenetic alterations described give insights into the sequence of events leading to cellular transformation and underscore the importance of the PTCH protein in skin homeostasis.