Peripheral nerves are organized into discrete compartments. Axons, Schwann cells (SCs), and endoneurial fibroblasts (EFs) reside within the endoneurium and are surrounded by the perineurium - a cellular sheath comprised of layers of perineurial glia (PNG). SC secretion of Desert Hedgehog (Dhh) regulates this organization. In Dhh nulls, the perineurium is deficient and the endoneurium is subdivided into small compartments termed minifascicles. Human Dhh mutations cause a neuropathy with similar defects. Here we examine the role of Gli1, a canonical transcriptional effector of hedgehog signaling, in regulating peripheral nerve organization in mice of both genders. We identify PNG, EFs, and pericytes as Gli1-expressing cells by genetic fate mapping. Although expression of Dhh by SCs and Gli1 in target cells is coordinately regulated with myelination, Gli1 expression unexpectedly persists in Dhh null EFs. Thus, Gli1 is expressed in EFs non-canonically i.e., independent of hedgehog signaling. Gli1 and Dhh also ...