An isolated hedgehog protein modified with one or more lipophilic moieties with the proviso that, in the instance wherein the hedgehog polypeptide is the mature N-terminal proteolytic fragment of a hedgehog protein, the lipophilic moiety is other than a sterol at the C-terminal residue, which hedgehog polypeptide binds to patched and has an amino acid sequence at least 80 percent identical to a hedgehog amino acid sequence selected from the group consisting of SEQ ID No:5, SEQ ID No:6, SEQ ID No:7, SEQ ID No:8, SEQ ID No:9, SEQ ID No:10, SEQ ID No:11, SEQ ID No:12, SEQ ID No:13 and SEQ ID No:14, or an extracellular fragment thereof.