Vlk is a secreted tyrosine kinase that plays crucial roles during vertebrate embryonic development including skeletal formation. Genetic studies suggest that Vlk can modulate the Hedgehog signaling pathway during skeletal development. Despite its potential roles as an extracellular regulator of signaling pathways, little is known regarding the molecular functions of Vlk. Here we show that Vlk can negatively regulate the Hedgehog signaling pathway. We found that Vlk can induce lysosomal degradation of Smoothened, a crucial transmembrane signal transducer of the Hedgehog pathway, through the interaction with the extracellular domain of Smoothened (Smo-ECD). In addition, we observed that Vlk can attenuate Hedgehog signaling-induced ciliary localization of Smoothened. Furthermore, Vlk-mediated suppression of Hedgehog signaling can be diminished by tyrosine-to-phenylalanine substitutions in Smo-ECD. Taken together, these results suggest that Vlk may function as a signaling regulator in extracellular space to modulate the Hedgehog pathway.