The migration of cellular extensions is guided by signals from tissues with which they contact. Many axon guidance molecules regulate growth cone migration by directly regulating actin cytoskeletal dynamics. Secreted morphogens control global patterns of cell fate decisions during organogenesis through transcriptional regulation, and constitute another class of guidance molecules. We have investigated the guidance roles of the morphogens Hedgehog and Decapentaplegic during directed outgrowth of cytoplasmic extensions in the Drosophila trachea. A subset of tracheal terminal cells adheres to the internal surface of the epidermis and elongates cytoplasmic processes called terminal branches. Hedgehog promotes terminal branch spreading and its extension over the posterior compartment of the epidermis. Decapentaplegic, which is expressed at the onset of terminal branching, restricts dorsal extension of the terminal branch and ensures its monopolar growth. Orthogonal expression of Hedgehog and Decapentaplegic in the epidermis instructs monopolar extension of the terminal branch along the posterior compartment, thereby matching the pattern of airway growth with that of the epidermis.