The Sonic hedgehog (SHh) precursor protein undergoes biosynthetic autoprocessing to cleave off and cholesterylate the SHh signaling ligand, a vital morphogen and oncogenic effector protein. Autoprocessing is self-catalyzed by SHhC, the SHh precursor's enzymatic domain. Here we describe the development and validation of the first cellular reporter to monitor human SHhC autoprocessing non-invasively in high-throughput compatible plates. The assay couples intracellular SHhC autoprocessing to the extracellular secretion of the bioluminescent nanoluciferase enzyme. We developed a wild-type (WT) SHhC reporter line for evaluating potential autoprocessing inhibitors by concentration response-dependent suppression of extracellular bioluminescence. 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 substrate activity of cholesterol. Inducibility of the D46A reporter was established using a synthetic sterol, 2-alpha carboxy cholestanol, designed to bypass the defect through intra-molecular general base catalysis. To facilitate direct nanoluciferase detection in the cell culture media of 1536-well plates, we designed a novel membrane-impermeable nanoluciferase substrate, CLZ-2P. 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.