Analyses using genetically tractable model organisms over the past 30 years have made key contributions to the elucidation of the intercellular signaling systems that underpin animal development. A prime example is the Hedgehog signalling pathway: originally characterized in Drosophila through analyses of the members of the segment polarity class of mutations, the discovery of vertebrate homologues of the Drosophila hedgehog gene led to the unveiling of its involvement in a plethora of processes in vertebrate development and to the recognition of its role as a key driver of certain types of cancer, in particular basal cell carcinoma (BCC). A striking feature of the Hedgehog pathway is its intimate relationship with sterols: the Hedgehog proteins themselves are covalently coupled to cholesterol; their receptor Patched is a multipass transmembrane protein that contains a Sterol Sensing Domain (SSD), first defined in proteins involved in cholesterol synthesis or transport; and the obligate transducer of the Hedgehog activity, the G-protein coupled receptor (GPCR)-like protein Smoothened is activated by cholesterol. Another defining feature of the pathway – at least in vertebrates – is its dependence upon the integrity of the primary cilium. In my talk, I will review our current understanding of this enigmatic pathway and illustrate some of its functions, highlighting insights based on studies in Drosophila and the zebrafish Danio rerio.