The present invention provides for a method of using BOC/CDO hedgehog antagonists to inhibit hedgehog signaling, as well as treating and diagnosing disorders relating to hedgehog signaling or overexpression of hedgehog, including cancer, cell proliferative disorders, and angiogenesis, neurological disorders, as well as other conditions affected by hedgehog signaling such as hair growth, neural stem cell differentiation, chondrogenesis and osteogenesis, lung surfactant production, formation of lamellated bodies in lung cells.