During embryonic gonad coalescence, primordial germ cells (PGCs) follow a carefully choreographed migratory route circumscribed by guidance signals towards somatic gonadal precursor cells (SGPs). In , SGP-derived Hedgehog (Hh), which serves as a guidance cue for the PGCs, is potentiated by mesodermally restricted HMGCoA-reductase (Hmgcr) and the ABC transporter Multi-drug-resistant-49 (Mdr49). Given the importance of cholesterol modification in the processing and long-distance transmission of the Hh ligand, we have analyzed the involvement of the Niemann-Pick disease type C-1a (NPC1a) protein, a cholesterol transporter, in germ cell migration and Hedgehog signaling. We show that mesoderm-specific inactivation of results in germ cell migration defects. Similar to , PGC migration defects in the embryos are ameliorated by a cholesterol-rich diet. Consistently, reduction in weakens the ability of ectopic HMG Coenzyme A reductase () to induce germ cell migration defects. Moreover, compromising levels influences Hh signaling adversely during wing development, a process that relies upon long-range Hh signaling. Last, doubly heterozygous embryos () display enhanced germ cell migration defects when compared with single mutants ( or ), supporting cooperative interaction between the two.