Previous work has shown that activin, a TGF(beta+) signaling molecule, permits pancreas development by repressing expression of Sonic hedgehog (Shh), a member of the hedgehog family of signaling molecules that antagonize pancreas development. Here we show that Indian hedgehog (Ihh), another hedgehog family member, and Patched 1 (Ptc1), a receptor and negative regulator of hedgehog activity, are expressed in pancreatic tissue.