A comprehensive comparison of Sonic (Shh), Indian (Ihh), and Desert (Dhh) hedgehog biological activities has not previously been undertaken. To test whether the three higher vertebrate Hh proteins have distinct biological properties, we compared recombinant forms of the N-terminal domains of human Shh, Ihh, and Dhh in a variety of cell-based and tissue explant assays in which their activities could be assessed at a range of concentrations. While we observed that the proteins were similar in their affinities for the Hh-binding proteins; Patched (Ptc) and Hedgehog-interacting protein (Hip), and were equipotent in their ability to induce Islet-1 in chick neural plate explant; there were dramatic differences in their potencies in several other assays. Most dramatic were the Hh-dependent responses of C3H10T1/2 cells, where relative potencies ranged from 80nM for Shh, to 500nM for Ihh, to >5μM for Dhh. Similar trends in potency were seen in the ability of the three Hh proteins to induce differentiation of chondrocytes in embryonic mouse limbs, and to induce the expression of nodal in the lateral plate mesoderm of early chick embryos. However, in a chick embryo digit duplication assay used to measure polarizing activity, Ihh was the least active, and Dhh was almost as potent as Shh. These findings suggest that a mechanism for fine-tuning the biological actions of Shh, Ihh, and Dhh, exists beyond the simple temporal and spatial control of their expression domains within the developing and adult organism.