Hedgehog proteins undergo an autoprocessing reaction to yield an amino-terminal fragment (Hh-N) and a carboxy-terminal fragment (Hh-C). Hh-N functions in signaling, whereas Hh-C, which consists of a Hint domain and a sterol recognition region, mediates the processing reaction. This reaction proceeds via an internal thioester intermediate and results in the covalent linkage of cholesterol to Hh-N. This modification in turn causes Hh-N to remain tightly associated with the cell surface, thus effectively limiting its free diffusion and range of action. We are interested in determining whether similar mechanisms might be operating in the biogenesis of other secreted molecules. Towards this goal, we have started to characterize a C. elegans protein (T05C12.10) with sequence similarity to the Hint domain of Hedgehog (Porter, JA. et al.,1996a,b; Burglin, TR., 1996). In this protein, as in the Hedgehog family, the Hint domain is located near the carboxy-terminus, and is preceded by an amino-terminal domain bearing a signal sequence (but with otherwise no homology to Hh-N). We have shown that the Hint domain of T05C12.10 can lead to the formation of an internal thioester intermediate in vitro . We have begun to characterize the functions of the T05C12.10 using RNA-mediated interference. Our results suggest that T05C12.10 is essential for molting. Injection of T05C12.10 double-stranded RNA results in 100% larval lethality. The larvae apparently die from a failure to shed old cuticles during molts. This phenotype resembles the phenotype of worms starved for cholesterol and of mutants lacking the megalin homologue, lrp-1 (Yochem, J. et al. 1999). The amino-terminal domain of T05C12.10 contains several sequence motifs similar to certain extracellular matrix proteins. Consistent with this, T05C12.10 protein colocalizes with megalin in the apical surface of hypodermal cells during larval and adult stages. Western analysis indicates that there are two forms of T05C12.10 in vivo , and that the relative abundance of the smaller form increases during each molt. These observations suggest that processing of T05C12.10 coincides with, and may be regulated by, molting. We are currently determining the identity of the smaller form as well as testing its role in molting.