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Abstract
Pattern formation and morphogenesis depend on the careful execution of complex genetic programs, which are conserved in multicellular organisms. An important signal in some of these programs in Drosophila and vertebrates is the secreted Hedgehog (Hh) protein, which primarily functions as an inducer of morphogenetic signals. The Hh signal plays a decisive role in such critical developmental processes as neurulation and somite and limb formation. The Hh signalling pathway exhibits a novel mechanism of signal reception and transduction. In the absence of the Hh signal, the membrane protein Patched (Ptc) represses the constitutive signalling activity of a second membrane protein, Smoothened (Smo), by virtue of its ability to form a Ptc-Smo complex. Hence, mutations within the ptc gene that result in the failure of Ptc to inhibit Smo lead to constitutive activity of the Hh signalling pathway and to cancer, such as basal cell carcinoma. For activation of Hh-target genes, the N-terminal signalling domain of Hh binds to the Ptc-Smo receptor complex to activate two parallel signalling pathways. Furthermore, Hh limits its own range of action by impeding its diffusion through (i) covalent linkage of its N-terminal signalling moiety to cholesterol, mediated by the cholesterol transferase activity of its C-terminal moiety, and (ii) induction of, and sequestration by, its antagonist, Ptc.

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