Signalling by Hh (Hedgehog) proteins is among the most actively studied receptor-mediated phenomena relevant to development and post-embryonic homoeostatic events. The impact of signalling by the Hh proteins is profound, and work pertaining to the presentation of these proteins and the pathways engaged by them continues to yield unique insights into basic aspects of morphogenic signalling. We review here the mechanisms of signalling relevant to the actions of Hh proteins in vertebrates. We emphasize findings within the past several years on the recognition of, in particular, Sonic hedgehog by target cells, pathways of transduction employed by the seven-pass transmembrane protein Smoothened and end points of action, as manifest in the regulation of the Gli transcription factors. Topics of extended interest are those regarding the employment of heterotrimeric G-proteins and G-protein-coupled receptor kinases by Smoothened. We also address the pathways, insofar as known, linking Smoothened to the expression and stability of Gli1, Gli2 and Gli3. The mechanisms by which Hh proteins signal have few, if any, parallels. It is becoming clear in vertebrates, however, that several facets of signalling are shared in common with other venues of signalling. The challenge in understanding both the actions of Hh proteins and the overlapping forms of regulation will be in understanding, in molecular terms, both common and divergent signalling events.