Genome-wide association studies of complex immune-mediated diseases have indicated that many genetic factors, each with individual low risk, contribute to overall disease. It is therefore timely and important to characterize how immune responses may be subtly modified by tissue context. In this article, we explore the role of tissue-derived molecules in influencing the function of T cells, which, owing to their migratory nature, come into contact with many different microenvironments through their lifespan. Hedgehog (Hh) proteins act as secreted morphogens, providing concentration-dependent positional and temporal cell-fate specification in solid tissues. Hh signaling is required for embryogenesis and is important in postnatal tissue renewal and in malignancy. However, the function of Hh in dynamic, fluid systems, such as in mammalian immunity, is largely unknown. In this article, we show that Hh-dependent transcription in T cells promoted Th2 transcriptional programs and differentiation, exacerbating allergic disease. Of interest, expression of Sonic Hh increased in lung epithelial cells following the induction of allergic disease, and lung T cells upregulated Hh target gene expression, indicating that T cells respond to locally secreted Hh ligands in vivo. We show that Il4, the key Th2 cytokine, is a novel transcriptional target of Hh signals in T cells, providing one mechanism for the role of Hh in Th differentiation. We propose that Hh, secreted from inflamed, remodeling, or malignant tissue, can modulate local T cell function. Our data present an unexpected and novel role for tissue-derived morphogens in the regulation of fluid immune responses, with implications for allergy and tumor responses, suggesting new uses for anti-Hh therapeutics.