The Hedgehog (Hh) family of secreted signaling proteins has a broad variety of functions during metazoan development and implications in human disease. Despite Hh being modified by two lipophilic adducts, Hh migrates far from its site of synthesis and programs cellular outcomes depending on its local concentrations. Recently, lipoproteins were suggested to act as carriers to mediate Hh transport in Drosophila . Here, we examine the role of lipophorins (Lp), the Drosophila lipoproteins, in Hh signaling in the wing imaginal disk, a tissue that does not express Lp but obtains it through the hemolymph. We use the up-regulation of the Lp receptor 2 (LpR2), the main Lp receptor expressed in the imaginal disk cells, to increase Lp endocytosis and locally reduce the amount of available free extracellular Lp in the wing disk epithelium. Under this condition, secreted Hh is not stabilized in the extracellular matrix. We obtain similar results after a generalized knock-down of hemolymph Lp levels. These data suggest that Hh must be packaged with Lp in the producing cells for proper spreading. Interestingly, we also show that Patched (Ptc), the Hh receptor, is a lipoprotein receptor; Ptc actively internalizes Lp into the endocytic compartment in a Hh-independent manner and physically interacts with Lp. Ptc, as a lipoprotein receptor, can affect intracellular lipid homeostasis in imaginal disk cells. However, by using different Ptc mutants, we show that Lp internalization does not play a major role in Hh signal transduction but does in Hh gradient formation.