Hedgehog (Hh) signaling is required for embryonic patterning and postnatal physiology in invertebrates and vertebrates. With the revelation that the primary cilium is crucial for mammalian Hh signaling, the prevailing view that Hh signal transduction mechanisms are conserved across species has been challenged. However, more recent progress on elucidating the function of core Hh pathway cytosolic regulators in Drosophila, zebrafish and mice has confirmed that the essential logic of Hh transduction is similar between species. Here, we review Hh signaling events at the membrane and in the cytosol, and focus on parallel and divergent functions of cytosolic Hh regulators in Drosophila and mammals.