Smoothened (Smo) is a member of the Frizzled (FzD) class of G-protein-coupled receptors (GPCRs), and functions as the key transducer in the Hedgehog (Hh) signalling pathway. Smo has an extracellular cysteine-rich domain (CRD), indispensable for its function and downstream Hh signalling. Despite its essential role, the functional contribution of the CRD to Smo signalling has not been clearly elucidated. However, given that the FzD CRD binds to the endogenous Wnt ligand, it has been proposed that the Smo CRD may bind its own endogenous ligand. Here we present the NMR solution structure of the Drosophila Smo CRD, and describe interactions between the glucocorticoid budesonide (Bud) and the Smo CRDs from both Drosophila and human. Our results highlight a function of the Smo CRD, demonstrating its role in binding to small-molecule modulators.