Hedgehog (Hh) signaling ligands undergo carboxy terminal sterylation through specialized autoprocessing, called cholesterolysis. Sterylation is brought about intramolecularly in a single turnover by an adjacent enzymatic domain, called HhC, which is found in precursor Hh proteins only. Previous attempts to identify antagonists of the intramolecular activity of HhC have yielded inhibitors that bind HhC irreversibly through covalent mechanisms, as is common for protein autoprocessing inhibitors. Here, we report an exception to the "irreversibility rule"for autoprocessing inhibition. Using a fluorescence resonance energy transfer-based activity assay for HhC, we screened a focused library of sterol-like analogues for noncovalent inhibitors and identified and validated four structurally related molecules, which were then used for structure-activity relationship studies. The most effective derivative, tBT-HBT, inhibits HhC noncovalently with an IC50 of 300 nM. An allosteric binding site for tBT-HBT, encompassing residues from the two subdomains of HhC, is suggested by kinetic analysis, mutagenesis studies, and photoaffinity labeling. The inhibitors described here resemble a family of noncovalent, allosteric inducers of HhC paracatalysis which we have described previously. The inhibition and the induction appear to be mediated by a shared allosteric site on HhC.