What role does cholesterol play in Hedgehog protein processing?
Hedgehog proteins undergo unique autoprocessing requiring intein-like activity and lipid modifications for gradient formation. C-terminal domain cleaves N-terminal signaling peptide, covalently attaches cholesterol to C-terminus, and palmitate attaches to N-terminal cysteine via Skinny hedgehog HHAT acyltransferase in endoplasmic reticulum. Cholesterol moiety anchors Hedgehog to membranes of producing cells, restricts diffusion, enables multimeric sterol-rich puncta for long-range gradient and facilitates secretion via Dispatched transporter RND protein requiring sterol sensing domain. Without cholesterol, Hedgehog diffuses uncontrolled but fails to signal at distance, loses apical sorting. Thus lipid modifications crucial for morphogen gradient shaping.
Ref: Porter et al., Science 1996: Cholesterol modification of Hedgehog required for secretion, multimerization and gradient.