Cholesterol, the most abundant sterol in mammalian cells, plays critical roles in Hh signaling. On one hand, the linkage of cholesterol to the carboxyl terminus of the mature Hh protein facilitates its secretion. On the other hand, the Hh-receiving cells require cholesterol to activate SMO to transduce the signal. Recent structural studies have revealed multiple sterol binding sites in the SMO protein.

Reference
Pubmed: Hu A, Zhang JZ, Wang J, Li CC, Yuan M, Deng G, Lin ZC, Qiu ZP, Liu HY, Wang XW, Wei PC, He X, Zhao X, Qiu WW, Song BL. Cholesterylation of Smoothened is a calcium-accelerated autoreaction involving an intramolecular ester intermediate. Cell Res. 2022 Mar;32(3):288-301. doi: 10.1038/s41422-022-00622-0.