Within the past few years, members of the hedgehog (hh) family of secreted signalling proteins have emerged as the primary signals generated by certain embryonic patterning centres. In vertebrate embryos, for example, sonic hedgehog expression in the notochord appears to be responsible for the local and long-range induction of ventral cell types within the neural tube and somites (reviewed in refs 1, 2). Protein products encoded by hh family members are synthesized as precursors that undergo autoprocessing to generate an amino-terminal domain that appears to be responsible for both local and long-range signalling activities, and a carboxy-terminal domain that contains the autoprocessing activity. As part of an effort to understand how hh family members participate in cell-to-cell signalling, we have determined and report here the crystal structure at 1.7 A of the amino-terminal domain of murine Sonic hedgehog (Shh-N). The structure revealed a tetrahedrally coordinated zinc ion that appears to be structurally analogous to the zinc coordination sites of zinc hydrolases, such as thermolysin and carboxypeptidase A. This previously unsuspected catalytic site represents a distinct activity from the autoprocessing activity that resides in the carboxy-terminal domain.