The gastrointestinal tract develops from the embryonic gut, which is composed of an endodermally derived epithelium surrounded by cells of mesodermal origin. Cell signaling between these two tissue layers appears to play a critical role in coordinating patterning and organogenesis of the gut and its derivatives. We have assessed the function of Sonic hedgehog and Indian hedgehog genes, which encode members of the Hedgehog family of cell signals. Both are expressed in gut endoderm, whereas target genes are expressed in discrete layers in the mesenchyme. It was unclear whether functional redundancy between the two genes would preclude a genetic analysis of the roles of Hedgehog signaling in the mouse gut. We show here that the mouse gut has both common and separate requirements for Sonic hedgehog and Indian hedgehog. Both Sonic hedgehog and Indian hedgehog mutant mice show reduced smooth muscle, gut malrotation and annular pancreas. Sonic hedgehog mutants display intestinal transformation of the stomach, duodenal stenosis (obstruction), abnormal innervation of the gut and imperforate anus. Indian hedgehog mutants show reduced epithelial stem cell proliferation and differentiation, together with features typical of Hirschsprung's disease (aganglionic colon). These results show that Hedgehog signals are essential for organogenesis of the mammalian gastrointestinal tract and suggest that mutations in members of this signaling pathway may be involved in human gastrointestinal malformations.