The C-terminal part of the indian 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 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). The dually lipidated indian hedgehog protein N-product is a morphogen which is essential for a variety of patterning events during development. Binds to the patched (PTCH1) receptor, which functions in association with smoothened (SMO), to activate the transcription of target genes (By similarity). Plays a role in morphogenesis of the skeleton by coordinating growth and differentiation of the endochondral skeleton. Positively regulates PTHLH expression during endochondral bone formation preventing chondrocyte hypertrophy. In contrast, participates in normal chondrocyte proliferation in a PTHLH-independent pathway (PubMed:8662546). cholesterol + glycyl-L-cysteinyl-[protein] + H(+) = [protein]-C-terminal glycyl cholesterol ester + N-terminal L-cysteinyl-[protein] Multimer. Interacts with BOC and CDON. Interacts with PTCH1 (By similarity). Interacts with glypican GPC3 (By similarity). The N-product remains associated with the cell surface. Co-localizes with HHAT in the ER and Golgi membrane. Expressed in developing midgut, lung and cartilage of developing long bones in the limb. Binds calcium and zinc ions; this stabilizes the protein fold and is essential for protein-protein interactions mediated by this domain. Cholesterylation is required for N-product targeting to lipid rafts and multimerization. The C-terminal domain displays an autoproteolysis activity and a cholesterol transferase activity (By similarity). Both activities result in the cleavage of the full-length protein and covalent attachment of a cholesterol moiety to the C-terminal of the newly generated N-product (By similarity). The N-product is the active species in both local and long-range signaling, whereas the C-product is degraded in the reticulum endoplasmic (By similarity). N-palmitoylation by HHAT of N-product is required for indian hedgehog protein N-product multimerization and full activity. Belongs to the hedgehog family.