Desert Hedgehog (DHH) is a member of the hedgehog family that includes Sonic hedgehog (SHH) and Indian hedgehog (IHH). Hedgehog family plays important role in regulating morphogenesis during developmental processes. DHH is secreted as a 45 kD precursor that undergoes autocatalytic cleavage into 19 kD N-terminal signaling domain and C-terminal domain which displays autoproteolytic activity and cholesterol transferase activity. N-terminal is soluble, but covalent attachment of cholesterol moiety by C-terminal domain restricts it to the cell surface, preventing it from diffusing freely. DHH binds to Patched receptors and Hedgehog interacting protein (Hip). DHH binding to Patched receptors results in the alleviation of Patched repression of Smoothened signaling. DHH is produced by Sertoli cells and may be involved in both male gonadal differentiation and perineurial development. Mutations in DHH have been associated with partial gonadal dysgenesis (PGD) accompanied by minifascicular polyneuropathy. DHH is also expressed by Schwann cells and is upregulated following nerve injury. Schwann cell-derived DHH signals the formation of the connective tissue sheath around peripheral nerves.