Embryonic induction of hair follicles is a fascinating model of localized morphogenesis from a simple homogeneous epithelial cell sheet. Accumulating evidence indicates that Sonic hedgehog (Shh) signaling plays a central role in hair follicle formation. We quantitated the expression levels of Shh and its receptor genes, Patched (Ptc) and Patched-2 (Ptch2), in two distinct experimental systems in which the development of hair follicles was suppressed. Shh, Ptc, and Ptch2 were induced about six- to tenfold in normal embryonic hair germs in vivo as well as in developing skin tissue maintained in organ culture. This induction was almost completely inhibited both in the developing skin tissue of ICR mice cultured with 30ng/ml epidermal growth factor and in embryos of Tabby mutant mice (a model of hypohidrotic ectodermal dysplasia) at 14.5-15.5 days postcoitus. Expression of Shh, Ptc and Ptch2 was induced in the Tabby embryos at 16.5 days postcoitus, indicating that Shh signaling may be involved in the formation not only of the well-studied guard hair but also of the awl hair. The potential of the two biological systems for studying molecular mechanisms in hair follicle formation, particularly at an early phase including Shh signaling, is discussed.