Over the past two decades, the secreted protein sonic hedgehog (SHH) has emerged as a critical morphogen during embryonic lung development, regulating the interaction between epithelial and mesenchymal cell populations in the airway and alveolar compartments. There is increasing evidence that the SHH pathway is active in adult lung diseases such as pulmonary fibrosis, asthma, chronic obstructive pulmonary disease, and lung cancer, which raises two questions: (1) What role does SHH signaling play in these diseases? and (2) Is it a primary driver of the disease or a response (perhaps beneficial) to the primary disturbance? In this review we aim to fill the gap between the well-studied period of embryonic lung development and the adult diseased lung by reviewing the hedgehog (HH) pathway during the postnatal period and in adult uninjured and injured lungs. We elucidate the similarities and differences in the epithelial–mesenchymal interplay during the fibrosis response to injury in lung compared with other organs and present a critical appraisal of tools and agents available to evaluate HH signaling.