Drosophila Suppressor of fused (Su(fu)) encodes a novel 468-amino-acid cytoplasmic protein which, by genetic analysis, functions as a negative regulator of the Hedgehog segment polarity pathway. Here we describe the primary structure, tissue distribution, biochemical and functional analyses of a human Su(fu) (hSu(fu)). Two alternatively spliced isoforms of hSu(fu) were identified, predicting proteins of 433 and 484 amino acids, with a calculated molecular mass of 48 and 54 kDa, respectively. The two proteins differ only by the inclusion or exclusion of a 52-amino-acid extension at the carboxy terminus. Both isoforms were expressed in multiple embryonic and adult tissues, and exhibited a developmental profile consistent with a role in Hedgehog signaling. The hSu(fu) contains a high-scoring PEST-domain, and exhibits an overall 37% sequence identity (63% similarity) with the Drosophila protein and 97% sequence identity with the mouse Su(fu). The hSu(fu) locus mapped to chromosome 10q24-q25, a region which is deleted in glioblastomas, prostate cancer, malignant melanoma and endometrial cancer. HSu(fu) was found to repress activity of the zinc-finger transcription factor Gli, which mediates Hedgehog signaling in vertebrates, and to physically interact with Gli, Gli2 and Gli3 as well as with Slimb, an F-box containing protein which, in the fly, suppresses the Hedgehog response, in part by stimulating the degradation of the fly Gli homologue. Coexpression of Slimb with Su(fu) potentiated the Su(fu)-mediated repression of Gli. Taken together, our data provide biochemical and functional evidence for the hypothesis that Su(fu) is a key negative regulator in the vertebrate Hedgehog signaling pathway. The data further suggest that Su(fu) can act by binding to Gli and inhibiting Gli-mediated transactivation as well as by serving as an adaptor protein, which links Gli to the Slimb-dependent proteasomal degradation pathway.