The sex determination master switch, Sex-lethal (Sxl), controls sexual development as a splicing and translational regulator. Hedgehog (Hh) is a secreted protein that specifies cell fate during development. We show that Sxl is in a complex that contains all of the known Hh cytoplasmic components, including Cubitus interruptus (Ci) the only known target of Hh signaling. Hh promotes the entry of Sxl into the nucleus in the wing disc. In the anterior compartment, the Hh receptor Patched (Ptc) is required for this effect, revealing Ptc as a positive effector of Hh. Some of the downstream components of the Hh signaling pathway also alter the rate of Sxl nuclear entry. Mutations in Suppressor of Fused or Fused with altered ability to anchor Ci are also impaired in anchoring Sxl in the cytoplasm. The levels, and consequently, the ability of Sxl to translationally repress downstream targets in the sex determination pathway, can also be adversely affected by mutations in Hh signaling genes. Conversely, overexpression of Sxl in the domain that Hh patterns negatively affects wing patterning. These data suggest that the Hh pathway impacts on the sex determination process and vice versa and that the pathway may serve more functions than the regulation of Ci.