In the absence of Hedgehog ligand, patched-1 (Ptch1) localizes to cilia and prevents ciliary accumulation and activation of smoothened (Smo). Upon ligand binding, Ptch1 is removed from cilia, and Smo is derepressed and accumulates in cilia where it activates signaling. The mechanisms regulating these dynamic movements are not well understood, but defects in intraflagellar transport components, including Ift27 and the BBSome, cause Smo to accumulate in cilia without pathway activation. We find that in the absence of ligand-induced pathway activation, Smo is ubiquitinated and removed from cilia, and this process is dependent on Ift27 and BBSome components. Activation of Hedgehog signaling decreases Smo ubiquitination and ciliary removal, resulting in its accumulation. Blocking ubiquitination of Smo by an E1 ligase inhibitor or by mutating two lysine residues in intracellular loop three causes Smo to aberrantly accumulate in cilia without pathway activation. These data provide a mechanism to control Smo's ciliary level during Hedgehog signaling by regulating the ubiquitination state of the receptor. © 2020 Desai et al.