The ADAMTS5 metzincin, a secreted zinc-dependent metalloproteinase, modulates the extracellular matrix (ECM) during limb morphogenesis and other developmental processes. Here, the role of ADAMTS5 was investigated by knockdown of zebrafish adamts5 during embryogenesis. This revealed impaired Sonic Hedgehog (Shh) signaling during somite patterning and early myogenesis. Notably, synergistic regulation of myod expression by ADAMTS5 and Shh during somite differentiation was observed. These roles were not dependent upon the catalytic activity of ADAMTS5. These data identify a non-enzymatic function for ADAMTS5 in regulating an important cell signaling pathway that impacts on muscle development, with implications for musculoskeletal diseases in which ADAMTS5 and Shh have been associated.