Experiments utilizing the Looptail mutant mouse, which harbors a missense mutation in the vangl2 gene, have been essential for studies of planar polarity and linking the function of the core planar cell polarity proteins to other developmental signals. Originally described as having dominant phenotypic traits, the molecular interactions underlying the Looptail mutant phenotype are unclear because Vangl2 protein levels are significantly reduced or absent from mutant tissues. Here we introduce a vangl2 knockout mouse and directly compare the severity of the knockout and Looptail mutant phenotypes by intercrossing the two lines and assaying the planar polarity of inner ear hair cells. Overall the vangl2 knockout phenotype is milder than the phenotype of compound mutants carrying both the Looptail and vangl2 knockout alleles. In compound mutants a greater number of hair cells are affected and changes in the orientation of individual hair cells are greater when quantified. We further demonstrate in a heterologous cell system that the protein encoded by the Looptail mutation (Vangl2(S464N)) disrupts delivery of Vangl1 and Vangl2 proteins to the cell surface as a result of oligomer formation between Vangl1 and Vangl2(S464N), or Vangl2 and Vangl2(S464N), coupled to the intracellular retention of Vangl2(S464N). As a result, Vangl1 protein is missing from the apical cell surface of vestibular hair cells in Looptail mutants, but is retained at the apical cell surface of hair cells in vangl2 knockouts. Similarly the distribution of Prickle-like2, a putative Vangl2 interacting protein, is differentially affected in the two mutant lines. In summary, we provide evidence for a direct physical interaction between Vangl1 and Vangl2 through a combination of in vitro and in vivo approaches and propose that this interaction underlies the dominant phenotypic traits associated with the Looptail mutation.