Smoothened stimulation by membrane sterols drives Hedgehog pathway activity.

Hedgehog signalling is fundamental to embryonic development and postnatal tissue regeneration. Aberrant postnatal Hedgehog signalling leads to several malignancies, including basal cell carcinoma and paediatric medulloblastoma. Hedgehog proteins bind to and inhibit the transmembrane cholesterol transporter Patched-1 (PTCH1), which permits activation of the seven-transmembrane transducer Smoothened (SMO) via a mechanism that is poorly understood. Here we report the crystal structure of active mouse SMO bound to both the agonist SAG21k and to an intracellular binding nanobody that stabilizes a physiologically relevant active state. Analogous to other G protein-coupled receptors, the activation of SMO is associated with subtle motions in the extracellular domain, and larger intracellular changes. In contrast to recent models, a cholesterol molecule that is critical for SMO activation is bound deep within the seven-transmembrane pocket. We propose that the inactivation of PTCH1 by Hedgehog allows a transmembrane sterol to access this seven-transmembrane site (potentially through a hydrophobic tunnel), which drives the activation of SMO. These results-combined with signalling studies and molecular dynamics simulations-delineate the structural basis for PTCH1-SMO regulation, and suggest a strategy for overcoming clinical resistance to SMO inhibitors.