The complete nucleotide sequence of the coding region of hedgehog (hh), a segment-polarity gene in Drosophila melanogaster, was determined. The gene was found to include three exons which would encode a 421- (or 471-) amino acid (aa) polypeptide with a long hydrophobic stretch. The hh mRNA was about 2.3 kb long and expressed throughout development. The hh expression in an embryo occurred in stripes, while that in imaginal discs occurred in the posterior compartment. As a whole, the spatial expression pattern of hh mRNA was very similar to that of engrailed (en), a homeobox gene required for the formation of the anterior-posterior compartment boundary. Unlike en, no hh expression was observed in the central nervous system.