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From insects to humans, the Hedgehog (Hh) signaling pathway has conserved roles in embryonic development and tissue homeostasis. However, it has been suggested that the lack of mammalian equivalents of Costal2 (Cos2) contributes to a divergence between the mechanism of Drosophila and mammalian Hh signal transduction. Here, we challenge this view by showing that the kinesin protein Kif7 is a critical regulator of Hh signaling in mice. Similar to Cos2, Kif7 physically interacted with Gli transcription factors and controlled their proteolysis and stability, and acted both positively and negatively in Hh signaling. Thus, Kif7 is a missing component of the mammalian Hh signaling machinery, implying a greater commonality between the Drosophila and mammalian system than the prevailing view suggests.