Rationale: Blood vessel growth and patterning have been shown to be regulated by nerve-derived signals. Desert hedgehog (Dhh), one of the Hedgehog family members, is expressed by Schwann cells of peripheral nerves. Objective: The purpose of this study was to investigate the contribution of Dhh to angiogenesis in the setting of ischemia. Methods and Results: We induced hindlimb ischemia in wild-type and Dhh ^–/– mice. First, we found that limb perfusion is significantly impaired in the absence of Dhh. This effect is associated with a significant decrease in capillary and artery density in Dhh ^–/– . By using mice in which the Hedgehog signaling pathway effector Smoothened was specifically invalidated in endothelial cells, we demonstrated that Dhh does not promote angiogenesis by a direct activation of endothelial cells. On the contrary, we found that Dhh promotes peripheral nerve survival in the ischemic muscle and, by doing so, maintains the pool of nerve-derived proangiogenic factors. Consistently, we found that denervation of the leg, immediately after the onset of ischemia, severely impairs ischemia-induced angiogenesis and decreases expression of vascular endothelial growth factor A, angiopoietin 1, and neurotrophin 3 in the ischemic muscle. Conclusions: This study demonstrates the crucial roles of nerves and factors regulating nerve physiology in the setting of ischemia-induced angiogenesis.