Sonic hedgehog (Shh) is found within gastric parietal cells and processed from a 45 kDa to a 19 kDa bioactive protein by an acid- and protease-dependent mechanism. To investigate whether Shh is associated with the parietal cell membrane compartment that becomes exposed to both acid and proteolytic enzymes during acid secretion, the cellular location of Shh within resting and stimulated gastric parietal cells was examined. Immunofluorescence microscopy of rabbit stomach sections showed that Shh co-localized predominantly with parietal and pit, not chief/zymogen or neck cell markers. In resting and histamine-stimulated rabbit gastric glands Shh was expressed only in parietal cells close to H⁺,K⁺-ATPase-containing tubulovesicular and secretory membranes with some co-localizing with -actin at the basolateral membrane. Gastric gland microsomal membranes were prepared by differential centrifugation, sucrose gradient and immunoisolation with an anti- H⁺,K⁺-ATPase subunit antibody. The 45 kDa and 19 kDa Shh proteins were detected by immunoblot in immunopurified H⁺,K⁺-ATPase-containing membranes from resting and stimulated gastric glands respectively. Incubating glands with a high KCl concentration removed Shh from the membranes. Histamine stimulated 19 kDa Shh secretion from gastric glands into the medium. In human gastric cancer 23132/87 cells cultured on permeable membranes, histamine increased 19 kDa Shh secretion into both apical and basolateral media. These findings show that Shh is a peripheral protein associated with resting and stimulated H⁺,K⁺-ATPase-expressing membranes. In addition, Shh appears to be expressed at or close to the basolateral membrane of parietal cells.