The non-visual ß-arrestins are cytosolic proteins highly conserved across species that participate in a variety of signalling events, including plasma membrane receptor degradation, recycling, and signalling, and that can also act as scaffolding for kinases such as MAPK and Akt/PI3K. In Drosophila melanogaster, there is only a single non-visual ß-arrestin, encoded by kurtz, whose function is essential for neuronal activity. We have addressed the participation of Kurtz in signalling during the development of the imaginal discs, epithelial tissues requiring the activity of the Hedgehog, Wingless, EGFR, Notch, Insulin, and TGFβ pathways. Surprisingly, we found that the complete elimination of kurtz by genetic techniques has no major consequences in imaginal cells. In contrast, the over-expression of Kurtz in the wing disc causes a phenotype identical to the loss of Hedgehog signalling and prevents the expression of Hedgehog targets in the corresponding wing discs. The mechanism by which Kurtz antagonises Hedgehog signalling is to promote Smoothened internalization and degradation in a clathrin- and proteosomal-dependent manner. Intriguingly, the effects of Kurtz on Smoothened are independent of Gprk2 activity and of the activation state of the receptor. Our results suggest fundamental differences in the molecular mechanisms regulating receptor turnover and signalling in vertebrates and invertebrates, and they could provide important insights into divergent evolution of Hedgehog signalling in these organisms.