The membrane protein, Patched, plays a critical role in patterning embryonic and imaginal tissues in Drosophila. patched constitutively inactivates the transcription of target genes such as wingless, decapentaplegic, and patched itself. The secreted protein, Hedgehog, induces transcription of target genes by opposing the Patched signaling pathway. Using the Gal4 UAS system we have overexpressed patched in wing imaginal discs and found that high Patched levels, expressed in either normal or ectopic patterns, result in loss of wing vein patterning in both compartments centering at the anterior/posterior border. In addition, patched inhibits the formation of the mechanosensory neurons, the campaniform sensilla, in the wing blade. The patched wing vein phenotype is modulated by mutations in hedgehog and cubitus interruptus (ci). Patched overexpression inhibits transcription of patched and decapentaplegic and post-transcriptionally decreases the amount of Ci protein at the anterior/posterior boundary. In hedgehogMrt wing discs, which express ectopic hedgehog, Ci levels are correspondingly elevated, suggesting that hedgehog relieves patched repression of Ci accumulation. Protein kinase A also regulates Ci; protein kinase A mutant clones in the anterior compartment have increased levels of Ci protein. Thus patched influences wing disc patterning by decreasing Ci protein levels and inactivating hedgehog target genes in the anterior compartment.