Ventral cell fates in the central nervous system are induced by Sonic hedgehog, a homolog of hedgehog, a secreted Drosophila protein. In the central nervous system, Sonic hedgehog has been identified as the signal inducing floor plate, motor neurons, and dopaminergic neurons. Sonic hedgehog is also involved in the induction of ventral cell type in the developing somites. ptc is a key gene in the Drosophila hedgehog signaling pathway where it is involved in transducing the hedgehog signal and is also a transcriptional target of the signal. PTC, a vertebrate homolog of this Drosophila gene, is genetically downstream of Sonic hedgehog (Shh) in the limb bud. We analyze PTC expression during chicken neural and somite development and find it expressed in all regions of these tissues known to be responsive to Sonic hedgehog signal. As in the limb bud, ectopic expression of Sonic hedgehog leads to ectopic induction of PTC in the neural tube and paraxial mesoderm. This conservation of regulation allows us to use PTC as a marker for Sonic hedgehog response. The pattern of PTC expression suggests that Sonic hedgehog may play an inductive role in more dorsal regions of the neural tube than have been previously demonstrated. Examination of the pattern of PTC expression also suggests that PTC may act in a negative feedback loop to attenuate hedgehog signaling.