Although members of the Hedgehog (Hh) family were initially described as morphogens, many of these early conclusions were based on experiments that used non-physiologically relevant forms of Hh. Native Hh is modified by cholesterol (HhNp) and palmitate. These hydrophobic modifications are responsible for the ability of Hh to associate with cellular membranes, a property that initially appeared inconsistent with its ability to act far from its site of synthesis. Although it is now clear that Hh

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... amily members are capable of acting directly in long-range signaling, the form of Hh capable of this activity remains controversial. We have previously provided evidence for a freely diffusible multimeric form of Sonic Hedgehog (Shh) termed s-ShhNp, which is capable of accumulating in a gradient fashion through a morphogenic field. Here, we provide further evidence that s-ShhNp is the physiologically relevant form of Shh. We show that the biological activity of freely diffusible ShhNp resides in its multimeric form and that this multimeric form is exceedingly stable, even to high concentrations of salt and detergent. Furthermore, we now validate the Shh-Shh interactions previously observed in the crystal structure of human Shh, showing that a highly conserved amino-terminal domain of Shh is important for the formation of s-ShhNp. We also conclusively show that palmitoylation is required for s-ShhNp formation. Thus, our results identify both protein-protein and protein-lipid interactions that are required for s-ShhNp formation, and provide the first structural analyses supporting the existence of Shh multimers.