The secreted proteins of the Hedgehog family have been implicated in many different processes in vertebrate development including cartilage differentiation, myotome and sclerotome specification, hair follicle development, limb morphogenesis and the specification of different neuronal cell types. In addition, the aberrant activation of the Hedgehog pathway has been identified as the likely cause of a number of tumours in humans including basal cell carcinomas (BCCs) and primitive neurectodermal tumours (PNETs). Elucidating the mechanisms by which Hedgehog signals are transduced will thus have widespread implications for our understanding of both normal development and disease.