Sonic hedgehog (Shh) directs early gut patterning via epithelial-mesenchymal signaling and remains expressed in endoderm-derived tissues into the adult period. In human adult gut epithelium SHH/SHH expression is strongest in basal layers, which suggests that SHH may function in the maintenance of gut epithelial stem or progenitor cells. Recent publications suggest a role for aberrant SHH/SHH expression in gut epithelial neoplasias. We hypothesized that the regenerating gut epithelium in inflammatory gut disorders would show an upregulation of SHH/SHH signaling and this abnormal signal may explain the increased incidence of neoplasia in these diseases. Archived healthy gut and inflammatory gut diseased tissues were analyzed by RNA in situ hybridization and immunohistochemistry to describe location and levels of SHH signaling. We show that SHH/SHH and its receptor PTCH1/PTCH1 expression is restricted to the glandular epithelium of the gut, in an antiluminal pattern (strongest in basal layers and weak to absent in luminal epithelium). Inflammatory diseases of the gut show dramatic increases in epithelial SHH signaling. Expression increases in inflamed glandular epithelium (including metaplastic glandular epithelium), losing its radial (crypt-villous) polarity, and expression appears upregulated and present in all epithelial cells. We also describe strong SHH/SHH and PTCH1/PTCH1 expression in intraepithelial and mucosal inflammatory cells. We suggest that SHH signaling in inflammatory diseases of the gut acts to ensure stem cell restitution of damaged mucosal epithelium. However, such signaling may also present a risk for neoplastic transformation.