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This gene encodes a protein that is instrumental in patterning the early embryo. It has been implicated as the key inductive signal in patterning of the ventral neural tube, the anterior-posterior limb axis, and the ventral somites. Of three human proteins showing sequence and functional similarity to the sonic hedgehog protein of Drosophila, this protein is the most similar. [Sonic hedgehog protein]: The C-terminal part of the sonic 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 (ShhN and ShhC) followed by the covalent attachment of a cholesterol moiety to the C-terminal of the newly generated ShhN (By similarity). Both activities occur in the reticulum endoplasmic (By similarity). Once cleaved, ShhC is degraded in the endoplasmic reticulum (By similarity).

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