Shuang Li, Yong Suk Cho, Bing Wang, Shuangxi Li, and Jin Jiang Hedgehog (Hh) transduces signals by promoting cell surface accumulation and activation of the G-protein-coupled receptor (GPCR)-family protein Smoothened (Smo) in Drosophila , but the molecular mechanism underlying the regulation of Smo trafficking remains poorly understood. Here, we identified the Cul4–DDB1 E3 ubiquitin ligase complex as being essential for Smo ubiquitylation and cell surface clearance. We found that the C-terminal intracellular domain of Smo recruits Cul4–DDB1 through the β subunit of trimeric G protein (Gβ), and that Cul4–DDB1–Gβ promotes the ubiquitylation of both Smo and its binding partner G-protein-coupled-receptor kinase 2 (Gprk2) and induces the internalization and degradation of Smo. Hh dissociates Cul4–DDB1 from Smo by recruiting the catalytic subunit of protein kinase A (PKA) to phosphorylate DDB1, which disrupts its interaction with Gβ. Inactivation of the Cul4–DDB1 complex resulted in elevated Smo cell surface expression, whereas an excessive amount of Cul4–DDB1 blocked Smo accumulation and attenuated Hh pathway activation. Taken together, our study identifies an E3 ubiquitin ligase complex targeting Smo for ubiquitylation and provides new insight into how Hh signaling regulates Smo trafficking and cell surface expression.