Lampreys are agnathans (vertebrates without jaws). They occupy a key phylogenetic position in the emergence of novelties and in the diversification of morphology at the dawn of vertebrates. We have used lampreys to investigate the possibility that embryonic midline signaling systems have been a driving force for the evolution of the forebrain in vertebrates. We have focused on Sonic Hedgehog/Hedgehog (Shh/Hh) signaling. In this article, we first review and summarize our recent work on the comparative analysis of embryonic expression patterns for Shh/Hh, together with Fgf8 (fibroblast growth factor 8) and Wnt (wingless-Int) pathway components, in the embryonic lamprey forebrain. Comparison with nonvertebrate chordates on one hand, and jawed vertebrates on the other hand, shows that these morphogens/growth factors acquired new expression domains in the most rostral part of the neural tube in lampreys compared to nonvertebrate chordates, and in jawed vertebrates compared to lampreys. These data are consistent with the idea that changes in Shh, Fgf8 or Wnt signaling in the course of evolution have been instrumental for the emergence and diversification of the telencephalon, a part of the forebrain that is unique to vertebrates. We have then used comparative genomics on Shh/Hh loci to identify commonalities and differences in noncoding regulatory sequences across species and phyla. Conserved noncoding elements (CNEs) can be detected in lamprey Hh introns, even though they display unique structural features and need adjustments of parameters used for in silico alignments to be detected, because of lamprey-specific properties of the genome. The data also show conservation of a ventral midline enhancer located in Shh/Hh intron 2 of all chordates, the very species which possess a notochord and a floor plate, but not in earlier emerged deuterostomes or protostomes. These findings exemplify how the Shh/Hh locus is one of the best loci to study genome evolution with regards to developmental events.