The Sonic Hedgehog (SHh) precursor protein undergoes biosynthetic autoprocessing to cleave off and covalently attach cholesterol to the SHh signaling ligand, a vital morphogen and oncogenic effector protein. Autoprocessing is self-catalyzed by SHhC, the SHh precursor's C-terminal enzymatic domain. A method to screen for small molecule regulators of this process may be of therapeutic value. Here, we describe the development and validation of the first cellular reporter to monitor human SHhC autoprocessing noninvasively in high-throughput compatible plates. The assay couples intracellular SHhC autoprocessing using endogenous cholesterol to the extracellular secretion of the bioluminescent nanoluciferase enzyme. We developed a WT SHhC reporter line for evaluating potential autoprocessing inhibitors by concentration response-dependent suppression of extracellular bioluminescence. Additionally, a conditional mutant SHhC (D46A) reporter line was developed for identifying potential autoprocessing activators by a concentration response-dependent gain of extracellular bioluminescence. The D46A mutation removes a conserved general base that is critical for the activation of the cholesterol substrate. Inducibility of the D46A reporter was established using a synthetic sterol, 2-α carboxy cholestanol, designed to bypass the defect through intramolecular general base catalysis. To facilitate direct nanoluciferase detection in the cell culture media of 1536-well plates, we designed a novel anionic phosphonylated coelenterazine, CLZ-2P, as the nanoluciferase substrate. This new reporter system offers a long-awaited resource for small molecule discovery for cancer and for developmental disorders where SHh ligand biosynthesis is dysregulated.