The Hedgehog (Hh) family of signaling molecules function as organizers in many morphogenetic processes. Hh signaling requires cholesterol in both signal-generating and -receiving cells, and it requires the tumor suppressor Patched (Ptc) in receiving cells in which it plays a negative role. Ptc both blocks the Hh pathway and limits the spread of Hh, Sequence analysis suggests that it has 12 transmembrane segments, 5 of which are homologous to a conserved region that has been identified in several proteins involved in cholesterol homeostasis and has been designated the Sterol-sensing domain (SSD), In the present study, we show that a Ptc mutant with a single amino acid substitution in the SSD induces target gene activation in a ligand-independent manner, This mutant Ptc(SSD) protein shows dominant-negative activity in blocking Hh signaling by preventing the downregulation of Smoothened (Smo), a positive effector of the Hh pathway. Despite its dominant-negative activity, the mutant Ptc protein functioned like the wild-type protein in sequestering and internalizing Hh, In addition, we show that Ptc(SSD) preferentially accumulates in endosomes of the endocytic compartment All these results suggest a role of the SSD of Ptc in mediating the vesicular trafficking of Ptc to regulate Smo activity.
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