Fig. 2. Hh processing and activity in Drosophila wing imaginal discs. (A) A schematic of Hh processing, which involves the removal of the C-terminal half at G257 and the concomitant addition of cholesterol. Palmitic acid is also added onto a N-terminal cysteine, in a reaction catalyzed by Sightless, a membrane bound O-acyltransferase. (B) HhN^palm consists of only the N-terminal part of Hh, which is not cholesterol modified, as the catalytic C-terminal part is missing. The addition of palmitic acid to this form is thought to be unaffected. (C) HhC85S^choles contains a point mutation, replacing cysteine 85 with serine. This form of Hh carries cholesterol but no palmitoyl adduct.