Transduction of Hedgehog signaling. In the absence of the ligand, Shh, Ptch1 in the cilium inhibits Smo activity. Sufu sequesters the Gli transcription factors, and the complex translocates through the primary cilium. Gli is phosphorylated by PKA at the basal body and cilia, priming it for proteolytic processing into repressor form. As a result, the transcription of Hh target genes is off (left). Upon Shh binding to Ptch1, the complex exits the cilium. Subsequently, Smo enters the cilium and inactivates PKA. This results in Gli dissociation from the Sufu and its ultimate activation. Active Gli enters the nucleus to initiate the transcription of Hh target genes (right).