Binding of Sonic Hedgehog (Shh) to Patched (Ptc) relieves the latter's tonic inhibition of Smoothened (Smo), a receptor that spans the cell membrane seven times. This initiates signaling which, by unknown mechanisms, regulates vertebrate developmental processes. We find that two molecules interact with mammalian Smo in an activation-dependent manner: G protein-coupled receptor kinase 2 (GRK2) leads to phosphorylation of Smo, and beta-arrestin 2 fused to green fluorescent protein interacts with Smo. These two processes promote endocytosis of Smo in clathrin-coated pits. Ptc inhibits association of beta-arrestin 2 with Smo, and this inhibition is relieved in cells treated with Shh. A Smo agonist stimulated and a Smo antagonist (cyclopamine) inhibited both phosphorylation of Smo by GRK2 and interaction of beta-arrestin 2 with Smo. beta-Arrestin 2 and GRK2 are thus potential mediators of signaling by activated Smo.