- The proliferation, differentiation, and fusion of a small number of myogenic precursor cells must be precisely regulated during development to ensure the proper size, organization, and function of the limb musculature. We have examined the role of Sonic hedgehog (Shh) in these processes by both augmentation and inhibition of the Shh-mediated signaling pathway. Our data show that Shh regulates muscle development by repressing the terminal differentiation of early myogenic precursor cells and does not function as a myoblast mitogen. Shh function in hypaxial muscle appears to be spatially restricted to the early myoblast population within the ventral muscles of the posterior region of the limb. Furthermore, Shh appears to act as a permissive, rather than an inductive, signal for slow MyHC expression in myoblasts. Our data thus provide the foundation for a new hypothesis for Shh function in hypaxial skeletal muscle development.