The Hedgehog (Hh) signaling pathway plays crucial roles both in embryonic development and in adult stem cell function. The timing, duration and location of Hh signaling activity need to be tightly controlled. Abnormalities of Hh signal transduction lead to birth defects or malignant tumors. Recent data point to ubiquitination-related posttranslational modifications of several key Hh pathway components as an important mechanism of regulation of the Hh pathway. Here we review how ubiquitination regulates the localization, stability and activity of the key Hh signaling components.