The Hedgehog signaling pathway regulates normal cell growth and differentiation. When deregulated, the Hedgehog pathway leads to tumorigenesis and supports more aggressive phenotypes of human cancers, such as progression, metastasis, and therapeutic resistance. The glioma-associated oncogene homolog 1 (GLI1) family of zinc finger transcription factors is the nuclear mediator of the Hedgehog pathway that regulates genes essential for various stages of tumor development and progression. Consequently, several components of the Hedgehog pathway are major targets of cancer therapy, including GLI1 and smoothened. Although the GLI1 gene was initially identified as an amplified gene in glioblastoma, its amplification was found to be relatively rare. No somatic mutations have been reported in the GLI1 gene. Notably, two decades after the discovery of the GLI1 gene, the GLI1 transcript was recently found to undergo alternative splicing forming two shorter isoforms, an N-terminal deletion variant (GLI1ΔN) and a truncated GLI1 (tGLI1). These variants appear to have different patterns of tissue expression and functions. Most notably, the tGLI1 isoform behaves as a gain-of-function GLI1 that can induce expression of genes not regulated by GLI1 and promotes more aggressive cancer phenotypes. Therefore, this review will focus on the structural and functional differences between these isoforms, and also on their contributions to important cancer cell characteristics, including proliferation, motility, invasion, and angiogenesis.