Hedgehog signaling is an important component of cell-cell communication during bilaterian development, and abnormal Hedgehog signaling contributes to disease and birth defects. Hedgehog genes are composed of a ligand ("hedge") domain and an autocatalytic intein ("hog") domain. Hedgehog (hh) ligands bind to a conserved set of receptors and activate downstream signal transduction pathways terminating with Gli/Ci transcription factors. We have identified five intein-containing genes in the anthozoan cnidarian Nematostella vectensis, two of which (NvHh1 and NvHh2) contain definitive hedgehog ligand domains, suggesting that to date, cnidarians are the earliest branching metazoan phylum to possess definitive Hh orthologs. Expression analysis of NvHh1 and NvHh2, the receptor NvPatched, and a downstream transcription factor NvGli (a Gli3/Ci ortholog) indicate that these genes may have conserved roles in planar and trans-epithelial signaling during gut and germline development, while the three remaining intein-containing genes (NvHint1,2,3) are expressed in a cell-type-specific manner in putative neural precursors. Metazoan intein-containing genes that lack a hh ligand domain have previously only been identified within nematodes. However, we have identified intein-containing genes from both Nematostella and in two newly annotated lophotrochozoan genomes. Phylogenetic analyses suggest that while nematode inteins may be derived from an ancestral true hedgehog gene, the newly identified cnidarian and lophotrochozoan inteins may be orthologous, suggesting that both true hedgehog and hint genes may have been present in the cnidarian-bilaterian ancestor. Genomic surveys of N. vectensis suggest that most of the components of both protostome and deuterostome Hh signaling pathways are present in anthozoans and that some appear to have been lost in ecdysozoan lineages. Cnidarians possess many bilaterian cell-cell signaling pathways (Wnt, TGFbeta, FGF, and Hh) that appear to act in concert to pattern tissues along the oral-aboral axis of the polyp. Cnidarians represent a diverse group of animals with a predominantly epithelial body plan, and perhaps selective pressures to pattern epithelia resulted in the ontogeny of the hedgehog pathway in the common ancestor of the Cnidaria and Bilateria.