Negative regulator of the smoothened signaling pathway, which acts as a receptor for hedgehog (SHH, IHH and DHH) morphogens (PubMed:9811851). In absence of hedgehog, acts as an inhibitor of smoothened protein (SMO) by preventing SMO access to cholesterol: mechanistically, acts as a cholesterol transporter, which depeletes cholesterol from the outer leaflet of plasma membrane, thereby preventing cholesterol-binding to the extracellular CRD region of SMO. Hedgehog-binding inhibits PTCH1 cholesterol transporter activity, promoting SMO activation by cholesterol and transduction of the smoothened signaling pathway. Molecular mechanism governing cholesterol transport are still unclear: may move cholesterol from the outer to the inner leaflet of the membrane in exchange for potassium or sodium ion export in the opposite direction (By similarity). In contrast to PTCH1 ortholog, PTCH2 is not essential for viability and plays a more limited role. Plays a role in epidermal homeostasis in mature skin (By similarity). Plays a role in the control of cellular growth (PubMed:18285427). {ECO:0000250|UniProtKB:O35595, ECO:0000250|UniProtKB:Q61115, ECO:0000269|PubMed:18285427, ECO:0000269|PubMed:9811851}. This is the function of PTCH2 (patched 2, ENSG00000117425).