The C-terminal part of the desert hedgehog protein precursor displays an autoproteolysis and a cholesterol transferase activity (By similarity). Both activities result in the cleavage of the full-length protein into two parts (N-product and C-product) followed by the covalent attachment of a cholesterol moiety to the C-terminal of the newly generated N-product (By similarity). Both activities occur in the reticulum endoplasmic (By similarity). Functions in cell-cell mediated juxtacrine signaling . Promotes endothelium integrity . Binds to PTCH1 receptor, which functions in association with smoothened (SMO), to activate the transcription of target genes in endothelial cells . In Schwann cells, controls the development of the peripheral nerve sheath and the transition of mesenchymal cells to form the epithelium-like structure of the perineurial tube (By similarity).
The dually lipidated desert hedgehog protein N-product is essential for a variety of patterning events during development (By similarity). Binds to the patched (PTCH1) receptor, which functions in association with smoothened (SMO), to activate the transcription of target genes (, ). Required for normal testis development and spermatogenesis, namely for the formation of adult-type Leydig cells and normal development of peritubular cells and seminiferous tubules (By similarity). Activates primary cilia signaling on neighboring valve interstitial cells through a paracrine mechanism (By similarity). May induce motor neurons in lateral neural tube and may have a polarizing activity . Prevents the desert hedgehog protein precursor binding to PTCH1 .
Subcellular locations: Cell membrane
Subcellular locations: Endoplasmic reticulum membrane, Golgi apparatus membrane, Secreted, Cell membrane
Co-localizes with HHAT in the ER and Golgi membrane.