Receptor-type E3 ubiquitin ligases enable extracellular signals to control ubiquitylation in the cytoplasm, playing widespread roles in development, metabolism, and immunity. Using cryoelectron microscopy, integrated with biophysical and functional studies, we visualized a human E3 complex composed of two transmembrane proteins, MEGF8 and MOSMO, and the intracellular RING-family protein MGRN1. This MEGF8-MOSMO-MGRN1 (MMM) complex attenuates Hedgehog signaling by ubiquitylating Smoothened (SMO), a G-protein-coupled receptor (GPCR) that transduces morphogen signals. A long helix in the MMM complex engages SMO using an intramembrane degron and extends into the cytoplasm to suspend an activated and precisely oriented RING domain below the plasma membrane. This architecture enables ubiquitylation of the cytoplasmic surface of SMO, reducing SMO abundance at primary cilia. Our structure provides insights into MEGF8 mutations, which cause multi-organ birth defects, and defines a paradigm for how transmembrane E3 ligases control the cell surface abundance of GPCRs and other signaling receptors.