Together with BOC, forms a coreceptor required for sonic hedgehog (SHH) handoff to its patched receptor (PTCH1 or PTCH2), thereby allowing activation of the smoothened signaling pathway (By similarity). Binds to the dually lipid-modified Sonic hedgehog protein N-product (ShhN) downstream of SCUBE2 carrier and promotes its release to GAS1 (By similarity). ShhN is then directly transferred to patched receptor by GAS1 (By similarity). May also mediate cell-cell interactions between muscle precursor cells, promoting differentiation of myogenic cells (By similarity). . This is the function of CDON (cell adhesion associated, oncogene regulated, ENSG00000064309).