Constitutive PI3K/AKT activation is relevant to multiple aspects of tumor growth and survival in numerous cancers including diffuse large B cell lymphoma (DLBCL). For example, PTEN loss is one of the mechanisms leading to constitutive PI3K/AKT activation in a subset of DLBCL. Smoothened (SMO) is a seven transmembrane spanning and Frizzled-class G-protein coupled receptor that functions as a Hedgehog (Hh) signal transducer. SMO is overexpressed in DLBCL cell lines and tumors. While canonical Hh signaling culminates in the activation of GLI transcription factors and is best understood in the context of cilia, "noncanonical" Hh signaling does not involve GLI transcriptional activity and remains less well characterized. Here, we found that SMO is not only an integral component of lipid rafts but also plays an unexpected central role in the organization of raft microdomains (specialized glycolipid-enriched microdomains known to serve as a highly dynamic signaling platform for cell surface receptors and signaling proteins) and in the sorting of lipid raft-associated proteins. To address whether SMO co-localizes to lipid rafts in the context of DLBCL, HBL1 cells were engineered to stably overexpress a C-terminal SMO-mCherry-fusion protein and were incubated with FITC-Cholera toxin. Within 15 min, a large fraction of SMO-mCherry was co-localized with FITC-Cholera toxin in lipid raft clusters. We also performed immunostaining of endogenous SMO and CD59 in HBL1 cells. CD59 is a glycol-phosphatidyl inositol-anchored lipid raft protein. Immunostaining of live HBL1 cells revealed the colocalization of SMO and CD59 on the extracellular surface of HBL1 cells. No colocalization was found between SMO and the transferrin receptor (TF-R), a plasma membrane protein not associated with lipid rafts. Finally, immunoblotting analysis of detergent-free fractionation further corroborated SMO as a bona fide component of lipid rafts. We then tried to explore the functional relevance of SMO association to the lipid compartment. First, we examined the effects of SMO stable knockdown in DLBCL. We observed a marked decrease in the expression of raft-associated receptors and signaling proteins (e.g. IGFR1, EGFR, IRS1) while caveolin and flotillin, two functional components of lipid rafts, remained unaltered in their levels and distribution. Although only a portion of the overall pool of AKT and pAKT were localized to lipid rafts, SMO loss significantly reduced raft-localized total AKT and pAKT (T308/S473). Consistent with the well-established role of AKT in cell survival, SMO silencing also resulted in reduced DLBCL cell viability. To evaluate whether SMO regulated IGF1R expression at the transcriptional level, we analyzed the mRNA levels of GLI1, the immediate transcriptional target of canonical SMO signaling, and IGF1R in SMO-/- MEFs. Even if GLI1 transcript levels were reduced, consistent with the established mode of GLI1 regulation by SMO through the GLI2 transcription factor, IGF1R mRNA levels remained unchanged. Using GLI1-/- MEFs, we could confirm that the effect of SMO on surface receptors was independent of canonical Hh signaling. We also determined that the rate of IGFR degradation was comparable in the presence and absence of SMO. Total IGF1R receptor levels at steady state represent the balance of total protein synthesis and the fraction of existing receptors that is directed towards lysosomal degradation. To test whether the absence of SMO results in increased degradation, we inhibited lysosomal function with chloroquine (CHLQ). CHLQ had a far more pronounced impact on restoring IGF1R protein levels in SMO deficient cells than it did in control cells. These last results suggested that in the absence of SMO, a larger fraction of this receptor is directed towards lysosomal degradation, and thus resulting in lower steady state levels. In summary, our data confirm that SMO is localized to raft microdomains in lymphoma cells and play a novel role in the sorting of surface proteins for degradation or recycling. In particular, SMO increases the levels of raft resident receptors and facilitates the assembly of an AKT activating machinery to enhance lymphoma cell survival. This novel role of SMO in signal regulation at the level of lipid rafts has broad implications for cancer biology. Disclosures Vega: National Cancer Institute, national Institutes of Health: Other: Grant Funding-R01CA222918.