Sonic hedgehog (Shh) is an essential signaling peptide required for normal embryonic development. It represents a highly-conserved marker of odontogenesis amongst the toothed vertebrates. Signal transduction is involved in early specification of the tooth-forming epithelium in the oral cavity, and, ultimately, in defining tooth number within the established dentition. Shh also promotes the morphogenetic movement of epithelial cells in the early tooth bud, and influences cell cycle regulation, morphogenesis, and differentiation in the tooth germ. More recently, Shh has been identified as a stem cell regulator in the continuously erupting incisors of mice. Here, we review contemporary data relating to the role of Shh in odontogenesis, focusing on tooth development in mammals and cartilaginous fishes. We also describe the multiple actions of this signaling protein at the cellular level.