Hedgehog (Hh) signaling regulates multiple aspects of metazoan development and tissue homeostasis, and is constitutively active in numerous cancers. We identified Ubr3, an E3 ubiquitin ligase, as a novel, positive regulator of Hh signaling in Drosophila and vertebrates. Hh signaling regulates the Ubr3-mediated poly-ubiquitination and degradation of Cos2, a central component of Hh signaling. In developing Drosophila eye discs, loss of ubr3 leads to a delayed differentiation of photoreceptors and a reduction in Hh signaling. In zebrafish, loss of Ubr3 causes a decrease in Shh signaling in the developing eyes, somites, and sensory neurons. However, not all tissues that require Hh signaling are affected in zebrafish. Mouse UBR3 poly-ubiquitinates Kif7, the mammalian homologue of Cos2. Finally, loss of UBR3 up-regulates Kif7 protein levels and decreases Hh signaling in cultured cells. In summary, our work identifies Ubr3 as a novel, evolutionarily conserved modulator of Hh signaling that boosts Hh in some tissues.