In Drosophila, maintenance of parasegmental boundaries and formation of segmental grooves depend on interactions between segment polarity genes. Wingless and Engrailed appear to have similar roles in both short and long germ segmentation, but relatively little is known about the extent to which Hedgehog signaling is conserved. In a companion study to the Tribolium genome project, we analyzed the expression and function of hedgehog, smoothened, patched, and cubitus interruptus orthologs during segmentation in Tribolium. Their expression was largely conserved between Drosophila and Tribolium. Parental RNAi analysis of positive regulators of the pathway (Tc-hh, Tc-smo, or Tc-ci) resulted in small spherical cuticles with little or no evidence of segmental grooves. Segmental Engrailed expression in these embryos was initiated but not maintained. Wingless-independent Engrailed expression in the CNS was maintained and became highly compacted during germ band retraction, providing evidence that derivatives from every segment were present in these small spherical embryos. On the other hand, RNAi analysis of a negative regulator (Tc-ptc) resulted in embryos with ectopic segmental grooves visible during germband elongation but not discernible in the first instar larval cuticles. These transient grooves formed adjacent to Engrailed expressing cells that encircled wider than normal wg domains in the Tc-ptc RNAi embryos. These results suggest that the en-wg-hh gene circuit is functionally conserved in the maintenance of segmental boundaries during germ band retraction and groove formation in Tribolium and that the segment polarity genes form a robust genetic regulatory module in the segmentation of this short germ insect.