The Hedgehog (Hh) signalling pathway plays multiple fundamental roles during development, yet despite its importance our understanding of the mechanisms regulating pathway activity is still incomplete. Jing Yang and colleagues now identify the Rusc family of RUN and SH3 domain-containing proteins as negative regulators of Hh signalling. In this study (p. 3944) Rusc2 is first identified as an interactor of Sufu – a protein that binds Gli proteins (downstream effectors of the Hh pathway) and suppresses their transcriptional activity. In cell culture, Rusc1 and Rusc2 can inhibit Hh-induced Gli activation in a Sufu-dependent manner. Upon Hh stimulation, Sufu and Gli normally dissociate, allowing Gli translocation to the nucleus. Rusc appears to form a complex with Sufu/Gli in unstimulated cells, and various lines of evidence suggest a model whereby Rusc stabilises the Sufu/Gli complex, and its dissociation upon Hh stimulation is required for Gli activation. Importantly, in vivo experiments in Xenopus embryos are consistent with Rusc1/2 acting as negative regulators of Hh signalling; knockdown of Rusc1 induces phenotypes consistent with Hh pathway overactivation. Thus, this work characterises a new component of the Hh pathway and adds to our understanding of the mechanisms underpinning Hh signal transduction.