We describe a dominant gain-of-function allele of the segment polarity gene hedgehog. This mutation causes ectopic expression of hedgehog mRNA in the anterior compartment of wing discs, leading to overgrowth of tissue in the anterior of the wing and partial duplication of distal wing structures. The posterior compartment of the wing is unaffected. Other imaginal derivatives are affected, resulting in duplications of legs and antennae and malformations of eyes. In mutant imaginal wing discs, expression of the decapentaplegic gene, which is implicated in the hedgehog signaling pathway, is also perturbed. The results suggest that hedgehog protein acts in the wing as a signal to instruct neighboring cells to adopt fates appropriate to the region of the wing just anterior to the compartmental boundary.