Significance Hedgehog proteins regulate development and tissue homeostasis. They signal through activation of the transmembrane protein Smoothened. Smoothened hyperactivation underlies development of many tumors. Smoothened activity can be modulated by several synthetic small molecules, which have shown promise in the clinic. However, occurrence of resistance-inducing mutations limits their effectiveness. Little is known about endogenous small molecules that may inhibit Smoothened in vivo. Previous work suggested that lipids present in lipoproteins are required for Smoothened inhibition in vivo. Here, we use biochemical fractionation and lipidomics to identify these lipids as endocannabinoids and show that their activity as Smoothened inhibitors has been conserved from flies to mammals. Endocannabinoids may provide useful templates for the design of new therapeutic Smoothened antagonists.