Signalling by members of the Hedgehog family of secreted proteins plays a central role in the development of vertebrate and invertebrate embryos. In Drosophila, transduction of the Hedgehog signal is intimately associated with the activity of protein kinase A and the product of the segment polarity gene patched. We have cloned a homologue of patched from the zebrafish Danio rerio and analysed the spatiotemporal regulation of its transcription during embryonic development in both wild-type and mutant animals. We find a striking correlation between the accumulation of patched1 transcripts and cells responding to sonic hedgehog activity both in the neurectoderm and mesoderm, suggesting that like its Drosophila counterpart, patched1 is regulated by sonic hedgehog activity. Consistent with this interpretation, mis-expression of sonic hedgehog results in ectopic activation of patched1 transcription. Using dominant negative and constitutively active forms of the protein kinase A subunits, we also show that expression of patched1 as well as of other sonic hedgehog targets, is regulated by protein kinase A activity. Taken together, our findings suggest that the mechanism of signalling by Hedgehog family proteins has been highly conserved during evolution.