Hedgehog(Hh)is a morphogen that binds to its receptor Patched 1 and activates Smoothened(SMO),thereby governing embryonic development and postnatal tissue homeostasis.Cholesterol can bind and covalently conjugate to the luminal cysteine-rich domain(CRD)of human SMO at the D95 residue(D99 in mouse).The reaction mechanism and biological function of SMO cholesterylation have not been elucidated.Here,we show that the SMO-CRD undergoes auto-cholesterylation which is boosted by calcium and involves an intramolecular ester intermediate.In cells,Hh stimulation elevates local calcium concentration in the SMO-localized endosomes through store-operated calcium entry.In addition,we identify the signaling-incompetent SMO D95E mutation,and the D95E mutant SMO can bind cholesterol but cannot be modified or activated by cholesterol.The homozygous SmoD99E/D99E knockin mice are embryonic lethal with severe developmental delay,demonstrating that cholesterylation of CRD is required for full-length SMO activation.Our work reveals the unique autocatalytic mechanism of SMO cholesterylation and an unprecedented role of calcium in Hh signaling.