The Hedgehog (Hh) pathway is one of the fundamental signal transduction pathways in animal development and is also involved in stem-cell maintenance and carcinogenesis. The hedgehog (hh) gene was first discovered in Drosophila, and members of the family have since been found in most metazoa. Hh proteins are composed of two domains, an amino-terminal domain HhN, which has the biological signal activity, and a carboxy-terminal autocatalytic domain HhC, which cleaves Hh into two parts in an intramolecular reaction and adds a cholesterol moiety to HhN. HhC has sequence similarity to the self-splicing inteins, and the shared region is termed Hint. New classes of proteins containing the Hint domain have been discovered recently in bacteria and eukaryotes, and the Hog class, of which Hh proteins comprise one family, is widespread throughout eukaryotes. The non-Hh Hog proteins have carboxy-terminal domains (the Hog domain) highly similar to HhC, although they lack the HhN domain, and instead have other amino-terminal domains. Hog proteins are found in many protists, but the Hh family emerged only in early metazoan evolution. HhN is modified by cholesterol at its carboxyl terminus and by palmitate at its amino terminus in both flies and mammals. The modified HhN is released from the cell and travels through the extracellular space. On binding its receptor Patched, it relieves the inhibition that Patched exerts on Smoothened, a G-protein-coupled receptor. The resulting signaling cascade converges on the transcription factor Cubitus interruptus (Ci), or its mammalian counterparts, the Gli proteins, which activate or repress target genes.