Upregulation of Patched (Ptc), the Drosophila Hedgehog (Hh) receptor in response to Hh signaling limits the range of signaling within a target field by sequestering Hh. In vertebrates, Ptch1 also exhibits ligand-dependent transcriptional activation, but mutants lacking this response show surprisingly normal early development. The identification of Hh-interacting protein 1 (Hhip1), a vertebrate-specific feedback antagonist of Hh signaling, raises the possibility of overlapping feedback controls. We addressed the significance of feedback systems in sonic hedgehog (Shh)-dependent spinal cord patterning. Mouse embryos lacking both Ptch1 and Hhip1 feedback activities exhibit severe patterning defects consistent with an increased magnitude and range of Hh signaling, and disrupted growth control. Thus, Ptc/Ptch1-dependent feedback control of Hh morphogens is conserved between flies and mice, but this role is shared in vertebrates with Hhip1. Furthermore, this feedback mechanism is crucial in generating a neural tube that contains appropriate numbers of all ventral and intermediate neuronal cell types.