The cloning of the founding member of the Hedgehog (HH) family of secreted proteins two decades ago inaugurated a field that has diversified to encompass embryonic development, stem cell biology and tissue homeostasis. Interest in HH signalling increased when the pathway was implicated in several cancers and congenital syndromes. The mechanism of HH signalling is complex and remains incompletely understood. Nevertheless, studies have revealed novel biological insights into this system, including the function of HH lipidation in the secretion and transport of this ligand and details of the signal transduction pathway, which involves Patched 1, Smoothened and GLI proteins (Cubitus interruptus in Drosophila melanogaster), as well as, in vertebrates, primary cilia.