Project summary The Hedgehog (Hh) signaling pathway is essential for embryogenesis, for adult stem cell maintenance, and is involved in birth defects and cancer. In the absence of stimulation, the tumor suppressor membrane protein, Patched1 (Ptch1), inhibits the seven-spanner oncoprotein Smoothened (Smo), thus inhibiting Hh signaling. The pathway is activated by the Sonic Hedgehog ligand (Shh), which binds and inhibits Ptch1, allowing Smo to become active and to trigger downstream signaling events. In spite of the critical importance of Ptch1 and Smo, their molecular mechanisms remain obscure: it is unknown how Ptch1 inhibits Smo, how the Shh inhibits Ptch1, how Smo is activated, and how it relays signals downstream. We recently discovered that cholesterol is the long-sought endogenous Smo activator, and that Ptch1 controls Smo via cholesterol. We solved X-ray structures of active Smo, which suggested a mechanism for activation by cholesterol. The structures also explained the hyperactivity of a classical oncogenic Smo mutant and pointed to a portion in Smo likely involved in downstream signaling. In preliminary work, we discovered rapid cholesterol transfer from Smo to Ptch1, suggesting a novel mechanism for Smo inhibition by Ptch1. This cholesterol transfer is blocked by Shh, via the novel palmitate-dependent interaction between Shh and Ptch1, which we previously discovered, suggesting a simple mechanism for Hh pathway activation. We propose to use biochemistry, chemical, cell and structural biology to accomplish the following aims: A) To determine how the Ptch1 inhibits Smo, and how the Hh ligand inhibits Ptch1, to trigger Hh signaling B) To determine precisely how cholesterol activates Smo C) To elucidate how Smo relays Hh signals to the cytoplasm These studies are important for the following reasons: 1) They will advance our understanding of the Hh pathway, by deciphering critical signaling mechanisms; 2) They will clarify how Smo and Ptch1 mutations cause cancer; 3) They will identify novel targets for blocking oncogenic Hh signaling, based on the mechanisms of Smo and Ptch1; and 4) The novel lipid probes that we developed for studying Shh and Ptch1 will be broadly applicable beyond the Hh pathway.