Overexpression of either Wnt-1 or the GLI proteins results in cancer; however, the molecular basis for this transformation was poorly understood. The Wnt-1 and GLI proteins have now been placed in a signaling cascade downstream of the mammalian homologs of the Drosophila hedgehog and patched proteins. The Drosophila segment polarity gene hedgehog (hh) encodes a 19-25 kDa secreted protein that appears to function in embryonic and imaginal disc patterning. The ptc gene, also identified as a Drosophila segment polarity gene, encodes the transmembrane protein patched, the expression of which is precisely regulated during embryonic development. Hedgehog has been shown to enhance the expression of the Wnt family of proteins through a signaling cascade involving the GLI transcription factors, while patched functions as a repessor opposing hedgehog’s effects. Smoothened (Smo), a seven transmembrane receptor, is complexed with patched in many tissues and is believed to be an essential component in the Hh signaling pathway.