Shh (Sonic Hedgehog) is expressed in embryonic tissues that are critical for the patterning of the developing central nervous system, somite, and limb. It is also involved in whisker, hair, foregut, tooth, and bone development. Shh regulates neural and hematopoietic stem cell fate and is important for thymocyte differentiation and proliferation. In adult tissue Shh is associated with cancer development and tissue remodeling following injury. Palmitoylation and cholesterol addition of Shh contribute to its membrane tethering and assembly into multimers. Lipid modification and multimerization greatly increase Shh signaling potency. Shh can be released from the plasma membrane by the cooperative action of DISP1, SCUBE2, and TACE/ADAM17. Canonical signaling of Shh is mediated by a receptor complex that includes Patched (PTCH1, PTCH2) and Smoothened (SMO).