The fly morphogen Hedgehog (Hh) and its mammalian orthologs, Sonic, Indian, and Desert hedgehog, are secreted signaling molecules that mediate tissue patterning during embryogenesis and function in tissue homeostasis and regeneration in the adult. The function of all Hh family members is regulated at the levels of morphogen multimerization on the surface of producing cells, multimer release, multimer diffusion to target cells, and signal reception. These mechanisms are all known to depend on interactions of positively charged Hh amino acids (the Cardin-Weintraub (CW) motif) with negatively charged heparan sulfate (HS) glycosaminoglycan chains. However, a precise mechanistic understanding of these interactions is still lacking. The proteins of the Hh family are powerful morphogens that control growth and patterning of developing embryos. Current models for Hh activity suggest that the morphogen disperses from a localized source and forms a gradient that patterns fields of responsive cells expressing the Hh receptor Patched (Ptc).Genetic evidence suggests that this process critically depends on heparan sulfate proteoglycan (HSPG) 2 expression. Upon secretion to the cell surface, Drosophila Hh forms nanoscale oligomers on the cell surface that co-localize with HSPGs (1). HS binds to the Cardin-Weintraub (CW) motif found on all known Hhs and regulates their function in flies (2, 3) and mice (4). In Drosophila (5) as well as in mammalian cell culture (6, 7), Hhs are always released from producing cells in multimeric form, as demonstrated by gel filtration analysis of the soluble morphogen. Release of the multimeric morphogen (the processed Hh N-terminal signaling domain, designated HhNp) from the cell surface depends on the expression of Dispatched (8) and A disintegrin and metalloprotease (ADAM) family members that mediate ectodomain shedding from transfected Bosc23 cells (9). HS is involved in the formation of the HhNp extracellular gradient, which, in the fly, depends on the expression of the Drosophila Exostosin (Ext) family of proteins, encoded by the genes tout velu (ttv), brother of tout velu, and sister of tout velu and the glycosylphosphatidylinositollinked HSPGs Dally and Dally-like, corresponding to vertebrate glypicans (2, 3, 10). HS expression and Dally-like/glypican expression are also essential for signal reception and modulation on Ptc-expressing receiving cells (10 -14) and participate in HhNp-Ihog interaction (15). However, the essential role of direct morphogen-HSPG interactions in embryonic patterning was recently challenged (16). In that report, transgenic mice made deficient in two ShhNp CW amino acid residues implicated in HS binding (17) lacked an Shh-related phenotype, suggesting that direct morphogen-HS interactions were not essential for normal development. However, in that report as well as in others (16 -18), CW-dependent HS interactions were characterized using a recombinant, non-physiological monomeric morphogen termed ShhN, whereas embryogenesis depends entirely on the activity of morp...