Autophagy is a highly conserved degradative process that removes damaged or unnecessary proteins and organelles, and recycles cytoplasmic contents during starvation. Autophagy is essential in physiological processes such as embryonic development but how autophagy is regulated by canonical developmental pathways is unclear. Here we show that the Hedgehog signalling pathway inhibits autophagosome synthesis, both in basal and in autophagy-induced conditions. This mechanism is conserved in mammalian cells and in Drosophila, and requires the orthologous transcription factors Gli2 and Ci, respectively. Furthermore, we identify that activation of the Hedgehog pathway reduces PERK levels, concomitant with a decrease in phosphorylation of the translation initiation factor eukaryotic initiation factor 2α, suggesting a novel target of this pathway and providing a possible link between Hedgehog signalling and autophagy.