The Hedgehog (Hh) signal transduction pathway is essential for the development and patterning of numerous organ systems, and has important roles in a variety of human cancers. Genetic screens for mouse embryonic patterning mutants first showed a connection between mammalian Hh signaling and intraflagellar transport (IFT), a process required for construction of the primary cilium, a small cellular projection found on most vertebrate cells. Additional genetic and cell biological studies have provided very strong evidence that mammalian Hh signaling depends on the primary cilium. Here, we review the evidence that defines the integral roles that IFT proteins and cilia play in the regulation of the Hh signal transduction pathway in vertebrates. We discuss the mechanisms that control localization of Hh pathway proteins to the cilium, focusing on the transmembrane protein Smoothened (Smo), which moves into the cilium in response to Hh ligand. The phenotypes caused by loss of cilia-associated proteins are complex, which suggests that cilia and IFT play active roles in mediating Hh signaling rather than serving simply as a compartment in which pathway components are concentrated. Hh signaling in Drosophila does not depend on cilia, but there appear to be ancient links between cilia and components of the Hh pathway that may reveal how this fundamental difference between the Drosophila and mammalian Hh pathways arose in evolution.