HPI-1 (hydrate) is a Hedgehog (Hh) pathway inhibitor that suppresses signaling through Sonic Hh (IC50 = 1.5 μM) without significantly affecting Wnt signaling (IC50 ≥ 30 μM). HPI-1 suppresses Hh activation induced by loss of Suppressor of Fused or by Gli overexpression, suggesting action at posttranslational modification of Gli protein or at the interaction of Gli with a co-factor. HPI-1 (hydrate) also inhibits signaling through the oncogenic Smoothened (Smo) mutant SmoM2 in neuron precursors, preventing cell proliferation.