Sonic Hedgehog (Shh) and Indian Hedgehog (Ihh) are members of the Hedgehog (Hh) family of signaling molecules known to be involved in embryonic patterning and morphogenesis. The Hh proteins undergo an autocatalytic cleavage to yield an N-terminal and a C-terminal peptide, with the signaling capacities confined to the N peptide. Drosophila Hh-N has been shown to act via both short- and long-range signaling. In vertebrates, however, attempts to directly demonstrate Shh (SHH) or Ihh (IHH) proteins at a distance from producing cells have been largely unsuccessful. Furthermore, the fact that the Hh N peptides occur in a cholesterol-modified, membrane-tethered form is not easily reconciled with long-range signaling. This study used optimized immunohistochemistry combined with tissue separation and biochemical analyses in vivo and in vitro to determine the range of action of SHH and IHH in the mouse embryo. In all embryonic structures studied, we detect signaling peptides in producing cells, but we also find that ligands move over considerable distances depending on the tissue. These data provide direct evidence for the presence of Hedgehog signaling peptides in target compartments, suggesting a direct long-range action without a need for secondary mediators. Visualization of Hedgehog proteins in target tissues was achieved only under conditions that allowed proteoglycan/glycosaminoglycan (PG/GAG) preservation. Furthermore, we show that induced changes of the composition of PG/GAG in the tooth alter SHH signaling. These data suggest a crucial role for PG/GAGs in Hedgehog movement.