SUMMARYHedgehog (HH) signaling is essential for vertebrate and invertebrate embryogenesis. In Drosophila, feedback upregulation of the HH receptor Patched (PTC; PTCH in vertebrates), is required to restrict HH signaling during development. By contrast, PTCH1 upregulation is dispensable for early HH-dependent patterning in mice. Unique to vertebrates are two additional HH-binding antagonists that are induced by HH signaling, HHIP1 and the PTCH1 homologue PTCH2. Although HHIP1 functions semi-redundantly with PTCH1 to restrict HH signaling in the developing nervous system, a role for PTCH2 remains unresolved. Data presented here define a novel role for PTCH2 as a ciliary localized HH pathway antagonist. While PTCH2 is dispensable for normal ventral neural patterning, combined removal of PTCH2-and PTCH1-feedback antagonism produces a significant expansion of HH-dependent ventral neural progenitors. Strikingly, complete loss of PTCH2-, HHIP1-and PTCH1-feedback inhibition results in ectopic specification of ventral cell fates throughout the neural tube, reflecting constitutive HH pathway activation. Overall, these data reveal an essential role for liganddependent feedback inhibition of vertebrate HH signaling governed collectively by PTCH1, PTCH2 and HHIP1.