Cell patterning in the body segments of the Drosophila embryo requires activity of the segment polarity genes, a molecularly heterogeneous group defined by a generic mutant phenotype. Two of these genes, wingless (wg) and hedgehog (hh), encode proteins that enter the secretory pathway, implicating them as signals that instruct the fates of neighbouring cells. Genetic analysis has identified wg transcription as one of the targets of hh activity and it has been suggested that the spatial control of wg expression depends on the limited range of the hh signal and the differential competence of responding cells. I have tested this model by driving ubiquitous expression of the hh gene using the Hsp70 promoter. Here I report that, as predicted, this causes the ectopic activation of wg in only a subset of the cells of each parasegment. Using another target of hh activity as a probe, I demonstrate that the competence of cells to express wg is independent of their ability to receive the hh signal. Finally, I show that wg activation requires the function of the segment polarity gene fused, suggesting that the putative hh signal is transduced by the serine/threonine kinase that fused encodes.