The Hedgehog (Hh) and Epidermal growth factor receptor (EGFR) signaling pathways play critical roles in pattern formation and cell proliferation in invertebrates and vertebrates. In this study, we demonstrate a direct link between these two pathways in Drosophila melanogaster. Hh and EGFR signaling are each required for the formation of a specific region of the head of the adult fruitfly. We show that hh and vein (vn), which encodes a ligand of the Drosophila EGFR (Schnepp, B., Grumbling, G., Donaldson, T. and Simcox, A. (1996) Genes Dev. 10, 2302–13), are expressed in adjacent domains within the imaginal primordium of this region. Using loss- and gain-of-function approaches, we demonstrate that Hh activates vn expression. We also show that Hh activation of vn is mediated through the gene cubitus interruptus (ci) and that this activation requires the C-terminal region of the Ci protein. Finally, we demonstrate that wingless (wg) represses vn expression, thereby limiting the domain of EGFR signaling.