The hedgehog (HH) signaling pathway plays critical roles in the Drosophila ovary. Previous studies have provided basic information on the pattern of expression of genes within the HH signaling pathway in the mouse ovary and on potential effects of HH signaling on cultured ovarian cells. An in vivo approach with transgenic mice is necessary to determine the function of HH signaling. The studies in this dissertation used the Amhr2cre/+SmoM2 transgenic mouse line to investigate phenotypes associated with over-activation of hedgehog signaling in the ovary. Results of these studies determined that HH signaling can influence ovarian follicle development. Female Amhr2cre/+SmoM2 mice are infertile. Although mutant mice had developmental defects in the Mullerian duct, the primary cause of infertility was the failure of ovulation based on the fact that oocytes were trapped in the follicles of superovulated mice. No difference in HH signaling activity was detected between controls and mutants around the time of ovulation. Cumulus expansion was suboptimal but could not explain the complete loss of fertility in the mutants. Luteinization occurred and generated normal levels of progesterone in plasma, although there was a delay in corpus luteum (CL) formation. The major phenotype in the ovaries of mutant mice was reduced mRNA levels of genes typical of smooth muscle in the thecal-interstitial compartment and reduced expression of smooth muscle actin (SMA) associated with blood vessels in the theca, indicating that the thecal vasculature failed to mature. Failure of vascular maturation was most likely the leading cause of anovulation in Amhr2cre/+SmoM2 mutant mice. Vascular maturation failed to occur in the ovaries of mutant mice beginning at the primary stage of follicle development. The SmoM2-yellow fluorescent protein (YFP) fusion gene was expressed in the neonatal ovaries of mutant mice and HH signaling activity was elevated in mutants compared to controls around the time of birth. The vascular network in the cortex of ovaries on days 2 and 4 was of higher density in mutant mice compared to controls. Microarray analyses identified elevated mRNA levels of genes involved in vascular development, particularly genes involved in the formation of vascular networks and in the interaction between endothelial and vascular mesenchymal cells. HH signaling was over-active around the time of birth and may have altered development of the thecal vasculature, possibly leading to the lack of vascular maturation in follicles throughout life. Around the time of birth, levels of mRNA for genes involved in steroid production were elevated in the ovaries of mutant mice compared to controls. Some of these genes are normally expressed in the fetal adrenal gland, such as Cyp17a, Cyp21a, Cyp11b and Shh. Immunohistochemistry of CYP17A, CYP21A and SHH confirmed the expression of these genes in the ovaries of mutant mice but not controls, indicating the presence of adrenal-like cells in the ovaries of mutant mice around the time of birth. This is possibly a result of interrupted cell migration/sorting in the adrenogonadal primordium or differentiation of ovarian cells into adrenal-type cells. A higher rate of oocyte degeneration and abnormal development of the first wave of follicles occurred in mutant mice. Fewer primordial follicles were present in the ovaries of mutants compared to controls by 24 days of age. Virgin female Amhr2cre/+SmoM2 mutant mice developed ovarian pathology with high frequency. The pathological changes started between 60 to 120 days of age and progressed over time. Clusters of steroidogenic-like cells persisted from 120 days to 1.5 years of age and may contribute to the pathological changes in the ovaries of mutant mice. In summary, this dissertation provides strong evidence that HH signaling regulates development of the thecal vasculature and its maturation. Over-activation of HH signaling in the embryonic and neonatal ovary led to failure of the thecal vasculature to mature properly, and this was associated with anovulation throughout life. Furthermore, HH may be involved in cell migration/sorting or differentiation of steroidogenic cells in the embryonic and neonatal ovary. Over-activation of HH signaling activity early in life leads to development of ovarian pathology in aged mice.