The Hedgehog (Hh) signalling pathway has a crucial role in several developmental processes and is aberrantly activated in a variety of cancers. In Drosophila, many of the canonical Hh pathway components are phosphorylated, yet the precise role of these phosphorylation events in the regulation of Hh signal transduction is unclear. Furthermore, the Hh pathway receives input from several kinases that have well-described roles in other cellular functions, some of which have both positive and negative effects on Hh signalling. Several recent studies have characterized the role of specific phosphorylation events in the Hh pathway, and have begun to shed light on how phosphorylation of Hh signalling components affects their subcellular location, stability and activity to mediate the transcriptional response to the Hh gradient.