The Hedgehog (Hh) signaling pathway plays an essential role in vertebrate embryonic tissue patterning of many developing organs. Signaling occurs predominantly in primary cilia and is initiated by the entry of the G protein-coupled receptor (GPCR)-like protein Smoothened into cilia and culminates in gene transcription via the Gli family of transcription factors upon their nuclear entry. Here we identify an orphan GPCR, Gpr175 (also known as Tpra1 or Tpra40: transmembrane protein, adipocyte associated 1 or of 40 kDa), which also localizes to primary cilia upon Hh stimulation and positively regulates Hh signaling. Interaction experiments place Gpr175 at the level of PKA and upstream of the Gαi component of heterotrimeric G proteins, which itself localizes to cilia and can modulate Hh signaling. Gpr175 or Gαi1 depletion leads to increases in cellular cAMP levels and in Gli3 processing into its repressor form. Thus we propose that Gpr175 coupled to Gαi1 normally functions to inhibit the production of cAMP by adenylyl cyclase upon Hh stimulation, thus maximizing signaling by turning off PKA activity and hence Gli3 repressor formation. Taken together our data suggest that Gpr175 is a novel positive regulator of the Hh signaling pathway.