Sonic hedgehog (Shh), produced by the notochord and floor plate, is proposed to function as an inductive and trophic signal that controls somite and neural tube patterning and differentiation. To investigate Shh functions during somite myogenesis in the mouse embryo, we have analyzed the expression of the myogenic determination genes, Myf5 and MyoD, and other regulatory genes in somites of Shh null embryos and in explants of presomitic mesoderm from wild-type and Myf5 null embryos. Our findings establish that Shh has an essential inductive function in the early activation of the myogenic determination genes, Myf5 and MyoD, in the epaxial somite cells that give rise to the progenitors of the deep back muscles. Shh is not required for the activation of Myf5 and MyoD at any of the other sites of myogenesis in the mouse embryo, including the hypaxial dermomyotomal cells that give rise to the abdominal and body wall muscles, or the myogenic progenitor cells that form the limb and head muscles. Shh also functions in somites to establish and maintain the medio-lateral boundaries of epaxial and hypaxial gene expression. Myf5, and not MyoD, is the target of Shh signaling in the epaxial dermomyotome, as MyoD activation by recombinant Shh protein in presomitic mesoderm explants is defective in Myf5 null embryos. In further support of the inductive function of Shh in epaxial myogenesis, we show that Shh is not essential for the survival or the proliferation of epaxial myogenic progenitors. However, Shh is required specifically for the survival of sclerotomal cells in the ventral somite as well as for the survival of ventral and dorsal neural tube cells. We conclude, therefore, that Shh has multiple functions in the somite, including inductive functions in the activation of Myf5, leading to the determination of epaxial dermomyotomal cells to myogenesis, as well as trophic functions in the maintenance of cell survival in the sclerotome and adjacent neural tube.