The emergence of mutations in tyrosine kinases following treatment of cancer patients with molecular-targeted therapy represents a major mechanism of acquired drug resistance. Here, mutations in the serpentine receptor, Smoothened (SMO) are described, which result in resistance to a Hedgehog (Hh) pathway inhibitor, such as in medulloblastoma. Amino acid substitutions in conserved residues of SMO maintain Hh signaling, but result in the inability of the Hh pathway inhibitor, GDC-0449, to bind SMO and suppress the pathway. In some embodiments, the disclosure provides for novel mutant SMO proteins and nucleic acids and for screening methods to detect SMO mutations and methods to screen for drugs that specifically modulate mutant SMO exhibiting drug resistance.