Two models for Hh transport. A schematic of wing disc epithelia. (A) In model one, Gallet et al. suggest that wild-type Hh is normally secreted and released by Disp on the apical side (Gallet et al., 2006). In the absence of cholesterol, Hh could only be secreted basolaterally, where it would remain confined near the source. If, however, HhN^palm is expressed from peripodial cells (not shown in the diagram), it would flood the peripodial space (at the apical side of the columnar epithelium) and activate low target genes throughout. (B) By contrast, in model two and according to Callejo et al., Hh is also normally secreted and released by Disp on the apical side. However, according to their view, in receiving cells, Hh is normally present in the basolateral space, where it is trapped by either Ptc or HSPGs (Callejo et al., 2006). The binding of Hh to Ptc leads to high threshold target expression and to the sequestration of Hh near its source. Binding of Hh to HSPGs could lead to further transport. Without cholesterol modification, Hh is secreted in a Disp-independent manner on the apical side. There it would be free to spread throughout the disc, but would only activate low-level target genes, possibly via a distinct set of receptors. Because Ptc and HSPGs are not involved in the retention of HhN^palm, no gradient can be formed.