The expression of hedgehog (Hh) genes, their receptor, and the co-receptor in mice, rat, and bovine ovaries were investigated. RT-PCR of ovarian transcripts in mice showed amplification of transcripts for Indian (Ihh) and desert (Dhh) Hh, patched 1 (Ptch1), and smoothened (Smo) genes. Semi-quantitative RT-PCR and northern blot analyses showed that whole ovarian Ihh and Dhh transcripts decreased 4-24 h after hCG versus 0-48 h after pregnant mares serum gonadotrophin treatment in mice, whereas mouse Ptch1 and Smo transcripts were expressed throughout the gonadotropin treatments. Quantitative real-time RT-PCR (qRT-PCR) revealed that the expression of the Hh-patched signaling system with Ihh mRNA abundance in granulosa cells was greater, whereas Smo and Ptch1 mRNA abundance was less in theca cells of small versus large follicles of cattle. In cultured rat and bovine theca-interstitial cells, qRT-PCR analyses revealed that the abundance of Gli1 and Ptch1 mRNAs were increased (P<0.05) with sonic hedgehog (SHH) treatment. Additional studies using cultured bovine theca cells indicated that SHH induces proliferation and androstenedione production. IGF1 decreased Ihh mRNA abundance in bovine granulosa cells. The expression and regulation of Ihh transcripts in granulosa cells and Ptch1 mRNA in theca cells suggest a potential paracrine role of this system in bovine follicular development. This study illustrates for the first time Hh activation of Gli1 transcriptional factor in theca cells and its stimulation of theca cell proliferation and androgen biosynthesis.