The Hedgehog (Hh) pathway involved in development and regeneration is activated by the extracellular binding of Hh to the membrane receptor Patched (Ptch). We report the structures of human Ptch1 alone and in complex with the N-terminal domain of human Sonic hedgehog (ShhN) at resolutions of 3.9 and 3.6 angstroms, respectively, as determined by cryo–electron microscopy. Ptch1 comprises two interacting extracellular domains, ECD1 and ECD2, and 12 transmembrane segments (TMs), with TMs 2 to 6 constituting the sterol-sensing domain (SSD). Two steroid-shaped densities are resolved in both structures, one enclosed by ECD1/2 and the other in the membrane-facing cavity of the SSD. Structure-guided mutational analysis shows that interaction between ShhN and Ptch1 is steroid-dependent. The structure of a steroid binding–deficient Ptch1 mutant displays pronounced conformational rearrangements.