The close link between signaling by the developmental regulators of the Hedgehog family and cholesterol biochemistry has been known for some time. The morphogen is covalently attached to cholesterol in a peculiar autocatalytic reaction and embryonal disruption of cholesterol synthesis leads to malformations that mimic Hh signaling defects. Recently, it was furthermore shown that secreted Hh could hitchhike on lipoprotein particles to establish its morphogenic gradient in the developing embryo. Additionally, there is new evidence that the Hh‐receptor Patched transmits the (...) Hh signal by modulating the secretion of an inhibitory sterol molecule from the receiving cells. Here we present some of the most recent discoveries on the Hh–sterol link and discuss their implications from a systems design perspective. We predict that a robust functioning of the Hh pathway will require the involvement of more sterol metabolites, and these should be the subject of future research. BioEssays 29:1085–1094, 2007. © 2007 Wiley Periodicals, Inc. (shrink)