Medulloblastoma is a malignant brain tumor that arises in the cerebellum in children, presumably from granule neuron precursors (GNP). Advances in patient treatment have been hindered by a paucity of animal models that accurately reflect the molecular pathogenesis of human tumors. Aberrant activation of the Sonic hedgehog (Shh) and insulin-like growth factor (IGF) pathways is associated with human medulloblastomas. Both pathways are essential regulators of GNP proliferation during cerebellar development. In cultured GNPs, IGF signaling stabilizes the oncogenic transcription factor N-myc by inhibiting glycogen synthase kinase 3beta-dependent phosphorylation and consequent degradation of N-myc. However, determinants of Shh and IGF tumorigenicity in vivo remain unknown. Here we report a high frequency of medulloblastoma formation in mice following postnatal overexpression of Shh in cooperation with N-myc. Overexpression of N-myc, alone or in combination with IGF signaling mediators or with the Shh target Gli1, did not cause tumors. Thus, Shh has transforming functions in addition to induction of N-myc and Gli1. This tumor model will be useful for testing novel medulloblastoma therapies and providing insight into mechanisms of hedgehog-mediated transformation.