We describe a novel chick WD-protein, cSWiP-1, expressed in somitic mesoderm and developing limb buds as well as in other embryonic structures where Hedgehog signalling has been shown to play a role. Using embryonic manipulations we show that in somites cSWiP-1 expression integrates two signals originating from structures adjacent to the segmental mesoderm: a positive signal from the notochord and a negative signal from intermediate and/or lateral mesoderm. In explant cultures of somitic mesoderm, Shh protein induces cSWiP-1, while a blocking antibody to Shh inhibits the induction of cSWiP-1 by the notochord. These results show that the positive signal from the notochord is mediated by Shh. We also show that in limb buds cSWiP-1 is upregulated by ectopic Shh. This occurs in about the same time period as upregulation of BMP2, placing cSWiP-1 among the earliest markers for the change of limb pattern caused by ectopic Shh. We also describe a human homologue of cSWiP-1 and a mouse gene, mSWiP-2, that is more distantly related to SWiP-1, suggesting that SWiP-1 belongs to a novel subfamily of WD-proteins.