Hedgehog (Hh) signaling is critical for embryonic development and in differentiation, proliferation, and maintenance of multiple adult tissues. De-regulation of the Hh pathway is associated with birth defects and cancer. In the gastrointestinal tract, Hh ligands Sonic (Shh) and Indian (Ihh), as well as the receptor Patched (Ptch1), and transcription factors of Glioblastoma family (Gli) are all expressed during development. In the adult, Shh expression is restricted to the stomach and colon, while Ihh expression occurs throughout the luminal gastrointestinal tract, its expression being highest in the proximal duodenum. Several studies have demonstrated a requirement for Hh signaling during gastrointestinal tract development. However to date, the specific role of the Hh pathway in the adult stomach and intestine is not completely understood. The current review will place into context the implications of recent published data related to the biochemistry and cell biology of Hh signaling on the luminal gastrointestinal tract during development, normal physiology and subsequently carcinogenesis.