Penaeid shrimp embryos undergo holoblastic division, gastrulation by invagination, and limb bud formation of the first and second antennae and mandibles. Larvae progress through nauplius, protozoea, and mysis stages to postlarvae. Posterior segments form and differentiate during larval development. To study the role of the Hedgehog (Hh) pathway during penaeid shrimp development, gene, RNA, and protein sequences were identified by in silico analysis of genomes and transcriptomes. Penaeus vannamei, P. japonicus, and P. monodon Hh proteins were 526-533 amino acids long, encoded by four exons. The amphipod crustacean Parhyale hawaiensis Hh was also encoded by four exons, but Daphnia magna, Drosophila melanogaster, and Limulus polyphemus Hh proteins were encoded by three exons; therefore in malacostracan crustaceans a new splice site evolved in the ancestral Hh Exon 2. P. vannamei Patched (Ptc) was encoded by 18 exons, while Parhyale Ptc contained 17 exons, both expansions when compared to Daphnia, Drosophila, and Limulus. P. vannamei Smoothened (Smo) was encoded by 15 exons, as was Parhyale, while Daphnia, Drosophila, and Limulus Smo contained 11, 6, and 12 exons, respectively. The trend shows expansion of exons in all three malacostracan genes of the Hh pathway. P. vannamei hh, ptc, and smo mRNA expression was determined from developmental transcriptomes through postlarvae. Both hh and ptc showed low expression from zygote to gastrula, increased at limb bud, peaked at unhatched nauplius, and declined in nauplius and later larval stages. smo expression was found in zygotes, peaked in gastrula, and declined in limb bud and later stages. These results are consistent with a role for Hh signaling during segmentation in penaeid shrimp.