Publisher Summary This chapter discusses the current state of knowledge on notochord differentiation and signaling and the role of the notochordal basement membrane in notochord function. Notochord progenitors arise from the dorsal organizer. The dorsal organizer forms early during gastrulation to impart dorsal patterning to the mesoderm, regulate convergent extension movements of the ectoderm and mesoderm, and induce neurectoderm along the anterior–posterior axis. The internal turgor pressure generated inside notochord cells by the inflated vacuole and resisted by the notochordal basement membrane produces the stiffness of the notochord. The notochord basement membrane can be divided into three layers. Immediately adjacent to the notochord is a thin basal lamina that is surrounded by a wider region of clearly striated fibrils, thought to be collagen lattice, and an outer layer of loosely organized matrix associated with electron-dense granules In the two outer layers, the fibers appear to run both parallel and perpendicular to the notochord in alternate layers, which is thought to allow the sheath to resist longitudinal and circumferential stress equally. Notochord derived sonic hedgehog (Shh) has a well-established role in patterning of the vertebrate spinal cord. At its highest concentrations, Shh induces floorplate formation in the ventralmost part of the developing spinal cord. There are at least two other genes of the hedgehog gene family expressed in the midline of the Zebrafish embryo—tiggy winkle hedgehog is the paralog of shh and is expressed in the dorsal midline during gastrulation and echidna hedgehog, which is expressed solely in the notochord.