Smoothened (SMO), a class-Frizzled G protein-coupled receptor (class-F GPCR), transduces the Hedgehog signal across cell membrane. Sterols can bind to its extracellular cysteine rich domain (CRD) and to several sites in the 7 transmembrane helices (7-TMs) of SMO. However, the mechanism how sterols regulate SMO via multiple sites is unknown. Here we determined structures of SMO–G i complexes bound to the synthetic SMO agonist (SAG) and to 24( S ),25-epoxycholesterol (24( S ),25-EC). A novel sterol-binding site in the extracellular extension of TM6 was revealed to connect other sites in 7-TMs and CRD, forming an intramolecular sterol channel from the middle side of 7-TMs to CRD. Additional structures of two gain-of-function variants, SMO D384R and SMO G111C/I496C , showed that blocking the channel at its midpoints allows sterols to occupy the binding sites in 7-TMs, thereby activating SMO. These data indicate that sterol transport through the core of SMO is a major regulator of SMO-mediated signaling.