Hedgehog (Hh) signaling plays a key role in the development and maintenance of animal tissues. This signaling is mediated by the atypical G protein-coupled receptor (GPCR) Smoothened (Smo). Smo activation leads to signaling through several well-characterized effectors to activate Hh target gene expression. Recent studies have implicated activation of the heterotrimeric G protein subunit Gαi and the subsequent decrease in cellular cAMP levels in promoting the Hh response in flies and mammals. Although Hh stimulation decreases cAMP levels in some insect cell lines, here using a bioluminescence resonance energy transfer (BRET)-based assay we found that this stimulation had no detectable effect in Drosophila S2-R+ cells. However, we observed an unexpected and significant Gαs-dependent increase in cAMP levels in response to strong Smo activation in Smo-transfected cells. This effect was mediated by Smo's broadly conserved core, and was specifically activated in response to phosphorylation of the Smo C-terminus by GPCR kinase 2 (Gprk2). Genetic analysis of heterotrimeric G protein function in the developing Drosophila wing revealed a positive role for cAMP in the endogenous Hh response. Specifically, we found that mutation or depletion of Gαs diminished low-threshold Hh responses in Drosophila, whereas depletion of Gαi potentiated them (in contrast to previous findings). Our analysis suggested that regulated cAMP production is important for controlling the sensitivity of cellular responses to Hh in Drosophila.