Hedgehog (Hh) proteins are secreted molecules that play an essential role in development and tumorigenesis. In Drosophila cultured cells, phosphorylation of the kinesin-like Costal2 (Cos2) protein at Ser572 is triggered by the kinase fused (Fu) upon Hh pathway activation. Here, we validate the first phospho-antibody for one of the Hh pathway components, Cos2, as a universal in situ readout of Hh signal transduction. For the first time, this tool allows the visualisation of a gradient of signalling activity and therefore the range of the activating Hh ligand in different tissues. We also show that, in vivo, Fu kinase is activated by and necessary to transduce all levels of intracellular Hh signalling. Our study fills a gap in the understanding of the Hh pathway by showing that the molecular cascade leading to Cos2 phosphorylation is conserved in all cells activated by Hh. Therefore, we propose that the extracellular Hh information is conveyed to an intracellular signal through graded Fu kinase activity.