The Hedgehog proteins play a crucial role in metazoan embryo development. Constitutive activation of the pathway is associated with multiple types of cancer. Recent experimental data suggest involvement of Hedgehog signaling in vascular remodeling, germ cell migration, and axon guidance. The molecular mechanisms underlying these effects remain elusive. Here we show that yolk sac-derived endothelial cells and embryonic fibroblasts can directly respond to the Hedgehog signal by increased migration in an in vitro scratch (wound) assay. We also identify Hedgehog transcriptional target genes in these cells, many of which participate in cell migration, axon guidance, and angiogenesis processes. Inhibition of one such molecular pathway, neuropilin-flavomonooxygenase, blocks Hedgehog-induced cell migration. These findings suggest that Hedgehog signaling directly affects embryonic endothelial and fibroblast cell migration via molecules and pathways known to regulate cell migration in response to a variety of environmental cues.