Hedgehog (Hh) signaling controls embryonic development and adult tissue homeostasis through the G protein coupled receptor (GPCR)-family protein Smoothened (Smo). Upon stimulation, Smo accumulates on the cell surface in Drosophila or primary cilia in vertebrates, which is thought to be essential for its activation and function, but the underlying mechanisms remain poorly understood. Here we show that Hh stimulates the binding of Smo to a plasma membrane-associated kinase Gilgamesh (Gish)/CK1γ and that Gish fine-tunes Hh pathway activity by phosphorylating a Ser/Thr cluster (CL-II) in the juxtamembrane region of Smo carboxyl-terminal intracellular tail (C-tail). We find that CL-II phosphorylation is promoted by protein kinase A (PKA)-mediated phosphorylation of Smo C-tail and depends on cell surface localization of both Gish and Smo. Consistent with CL-II being critical for high-threshold Hh target gene expression, its phosphorylation appears to require higher levels of Hh or longer exposure to the same level of Hh than PKA-sitephosphorylation on Smo. Furthermore, we find that vertebrate CK1γ is localized at the primary cilium to promote Smo phosphorylationand Sonic hedgehog (Shh) pathway activation. Our study reveals a conserved mechanism whereby Hh induces a change in Smo subcellular localization to promote its association with and activation by a plasma membrane localized kinase, and provides new insight into how Hh morphogen progressively activates Smo.