Hedgehog signals are transduced through Patched receptors to the Smoothened (SMO)-SUFU-GLI and SMO-Gi-RhoA signaling cascades. MTOR-S6K1 and MEK-ERK signals are also transduced to GLI activators through post-translational modifications. The GLI transcription network up-regulates target genes, such as BCL2, FOXA2, FOXE1, FOXF1, FOXL1, FOXM1, GLI1, HHIP, PTCH1 and WNT2B, in a cellular context-dependent manner. Aberrant Hedgehog signaling in tumor cells leads to self-renewal, survival, proliferation and invasion. Paracrine Hedgehog signaling in the tumor microenvironment (TME), which harbors cancer-associated fibroblasts, leads to angiogenesis, fibrosis, immune evasion and neuropathic pain. Hedgehog-related genetic alterations occur frequently in basal cell carcinoma (BCC) (85%) and Sonic Hedgehog (SHH)-subgroup medulloblastoma (87%) and less frequently in breast cancer, colorectal cancer, gastric cancer, pancreatic cancer, non-small-cell lung cancer (NSCLC) and ovarian cancer. Among investigational SMO inhibitors, vismodegib and sonidegib are approved for the treatment of patients with BCC, and glasdegib is approved for the treatment of patients with acute myeloid leukemia (AML). Resistance to SMO inhibitors is caused by acquired SMO mutations, SUFU deletions, GLI2 amplification, other by-passing mechanisms of GLI activation and WNT/β-catenin signaling activation. GLI–DNA-interaction inhibitors (glabrescione B and GANT61), GLI2 destabilizers (arsenic trioxide and pirfenidone) and a GLI-deacetylation inhibitor (4SC-202) were shown to block GLI-dependent transcription and tumorigenesis in preclinical studies. By contrast, SMO inhibitors can remodel the immunosuppressive TME that is dominated by M2-like tumor-associated macrophages (M2-TAMs), myeloid-derived suppressor cells and regulatory T cells, and thus, a Phase I/II clinical trial of the immune checkpoint inhibitor pembrolizumab with or without vismodegib in BCC patients is ongoing.