Cell-fate mapping was used to identify cells that respond to the hedgehog (HH) signaling pathway and that are incorporated into the theca cell layer during ovarian follicle development. Expression of Gli1 is increased by HH signaling and can be used as a marker of cells responsive to HH in reporter mice. In transgenic Gli1ERcre/tdT mice, injection of tamoxifen (TAM) induces cre-mediated recombination and expression of td tomato (tdT) which leads to permanent fluorescent marking of cells expressing Gli1 and their progeny. The identity of tdT-positive cells was determined by co-staining ovaries for endothelial cells (CD31), pericytes (CSPG4), vascular smooth muscle cells (VSMC; smooth muscle actin) and steroidogenic cells (cytochrome P450 17A1). Gli1ERcre/tdT mice were injected with TAM on the day of birth. Cells positive for tdT in 2-day-old mice were identified as pericytes, located primarily in the medulla of the ovary in close proximity to endothelial cells. In both prepubertal mice and adult mice treated with equine chorionic gonadotropin to induce the formation of preovulatory follicles, tdT-positive cells were located within the theca cell layer and were identified as pericytes, VSMC and steroidogenic theca cells. Granulosa cells are known to express two HH ligands, Indian HH and desert HH (DHH). In DHHcre/tdT reporter mice, endothelial cells were marked as tdT-positive indicating that endothelial cells, in addition to granulosa cells, express Dhh in the ovary. These findings suggest that HH signaling may stimulate the development of the vasculature along with steroidogenic capacity of the theca layer during follicle development.