A long-range signal encoded by the Sonic hedgehog (Shh) gene has been implicated as the ventral patterning influence from the notochord that induces sclerotome and represses dermomyotome in somite differentiation. Long-range effects of hedgehog (hh) signaling have been suggested to result either from local induction of a secondary diffusible signal or from the direct action of the highly diffusible carboxy-terminal product of HH autoproteolytic cleavage. Here we provide evidence that the long-range somite patterning effects of SHH are instead mediated by a direct action of the amino-terminal cleavage product. We also show that pharmacological manipulations to increase the activity of cyclic AMP-dependent protein kinase A can selectively antagonize the effects of the amino-terminal cleavage product. Our results support the operation of a single evolutionarily conserved signaling pathway for both local and direct long-range inductive actions of HH family members.