Midline signaling by Hedgehog (Hh) family members has been implicated in patterning the vertebrate embryo. We have explored the potential regulatory role of cAMP-dependent protein kinase A (PKA) in these events. Zebrafish embryos injected with RNAs encoding Sonic hedgehog (Shh), Indian hedgehog (Ihh), or a dominant-negative regulatory subunit of PKA, PKI, have equivalent phenotypes. These include the expansion of proximal fates in the eye, ventral fates in the brain, and adaxial fates in somites and head mesenchyme. Moreover, ectopic expression of PKI partially rescues somite and optic stalk defects in no tail and cyclops mutants that lack midline structures that normally synthesize Shh. Conversely, all cell types promoted by ectopic expression of hhs and PKI are suppressed in embryos injected with RNA encoding a constitutively active catalytic subunit of PKA (PKA*). These results, together with epistasis studies on the block of ectopic Hh signaling by PKA*, indicate that PKA acts in target cells as a common negative regulator of Hedgehog signaling.