In the present study, we investigated the effects of the Sonic hedgehog (Shh) protein on porcine oocyte maturation and early embryo development. Immunohistochemistry showed activation of Shh signalling in cumulus–oocyte complexes (COCs), as reflected by Patched (Ptc), Smoothened (Smo) and Gli1 expression in oocytes, cumulus cells and granulosa cells, particularly those of small follicles (<2 mm in diameter). Western blot analysis showed Smo expression in COCs and in denuded oocytes derived from small and medium (3–7 mm)-sized follicles. Small follicles contained the highest concentration of Shh in follicular fluid compared with medium-sized and large (>7 mm in diameter) follicles. Supplementation with Shh (0.5 or 1 μg mL^–1) enhanced oocyte maturation compared with the control group (92.4% and 90.4% v. 81.9%, respectively; P < 0.05). This effect was reversed by the simultaneous addition of cyclopamine (1–2 μm), an Shh inhibitor. Similar to intact COCs, denuded COCs showed enhanced maturation following Shh supplementation. Furthermore, cyclin B1 content, extracellular signal-regulated kinase 1/2 phosphorylation, intracellular calcium release, blastocyst rate and total cell numbers were greater (P < 0.05) in oocytes matured in the presence of 0.5 and 1 μg mL^–1 Shh compared with control oocytes. The findings of the present study provide the first evidence that the Shh signalling pathway is active, or at least partially activated, in the porcine ovary and is likely to promote oocyte cytoplasmic and nuclear maturation, as well as subsequent in vitro development, although the underlying mechanisms remain to be elucidated.