e functional N-terminal fragment which is doubly lipidated. A cholesterol moiety, whose exact role in the mammalian system is still unresolved, is attached to the C-terminal of the fragment; the N-terminal is palmitoylated by HHAT. Secretion of lipidated Hh, possibly as oligomers, is facilitated by Disp1; Lrp2 and heparan sulfate proteoglycans appear to be required for long distance transport and Lrp2 may also play a role in ligand internalization. In the receiving/responding cells, Hh interacts with Ptch transmembrane receptors of which Ptch1 is the better characterized one. Unlike many other ligand responding receptors, Ptch does not activate the pathway. In the absence of Hh, Ptch1 represses the activity of downstream Smo, a seven transmembrane-spanning, receptor-like protein. The mechanism is poorly understood as the two proteins do not appear to physically interact. In the primary cilium, binding of Hh triggers Ptch1 internalization, shuttling of Smo from an endocytic vesicle to the primary cilium followed by activation of Gli transcription factors. The cilium, a microtubule-based organelle projecting from the cell surface, is present in most vertebrate cells and is essential for Hh signaling. In Drosophila, hyper-phosphorylation of Smo is critical for Hh signaling, as is the Cos2- Fu complex. In vertebrates, a shorter Smo lacks the main phosphorylation regions present in fly and the orthologs of Cos2 and Fu play little if any role. Instead, Sufu and components involved in the formation of the primary cilium that are critical for the mammalian pathway, have a minor role or are completely absent in fly. The regulation of Gli follows a similar pattern but the activation/repressor functions are carried out by three proteins in mammals, instead of one in fly. In the absence of signal, Gli2 and 3 are phosphorylated, recognized by Btrc and proteolytically processed to a repressor form in the case of Gli3 or completely degraded in the case of Gli2. Hh signal inhibits Gli processing and full-length transcriptional activators are imported to the nucleus. Several modulators control the extent of Hh signaling. Cdo1 and Boc are positive regulators with orthologs in fly; the positive Gas1 and the negative Hhip do not have equivalent orthologs. The modulators are cell surface proteins enriched in the cilium. Also present in the cilium is the negative regulator Sufu which in the absence of Hh signal, binds the Gli proteins preventing their translocation to the nucleus. Hh signal leads to inhibition of Sufu by mechanisms that are not clear. Gli proteins are zinc finger transcription factors that bind DNA sequences containing a 5'-GACCACCCA-3' consensus motif. Target genes include components of Hedgehog signaling along with other transcription factors and proteins involved in wide variety of functions. Deregulation of Hh pathway has been associated with many conditions, including several types of cancers....(less)