The lipid-modified morphogens Wnt and Hedgehog diffuse poorly in isolation yet can spread over long distances in vivo, predicting existence of two distinct forms of these morphogens. The first is poorly mobile and activates short-range target genes. The second is specifically packed for efficient spreading to induce long-range targets. Subcellular mechanisms involved in the discriminative secretion of these two forms remain elusive. Wnt and Hedgehog can associate with membrane microdomains, but the function of this association was unknown. Here we show that a major protein component of membrane microdomains, reggie-1/flotillin-2, plays important roles in secretion and spreading of Wnt and Hedgehog in Drosophila. Reggie-1 loss-of-function results in reduced spreading of the morphogens, while its overexpression stimulates secretion of Wnt and Hedgehog and expands their diffusion. The resulting changes in the morphogen gradients differently affect the short- and long-range targets. In its action reggie-1 appears specific for Wnt and Hedgehog. These data suggest that reggie-1 is an important component of the Wnt and Hedgehog secretion pathway dedicated to formation of the mobile pool of these morphogens.