Here we report the discovery of oncogenic mutations in the Hedgehog and mitogen-activated protein kinase (MAPK) pathways in over 80% of ameloblastomas, locally destructive odontogenic tumors of the jaw, by genomic analysis of archival material. Mutations in SMO (encoding Smoothened, SMO) are common in ameloblastomas of the maxilla, whereas BRAF mutations are predominant in tumors of the mandible. We show that a frequently occurring SMO alteration encoding p.Leu412Phe is an activating mutation and that its effect on Hedgehog-pathway activity can be inhibited by arsenic trioxide (ATO), an anti-leukemia drug approved by the US Food and Drug Administration (FDA) that is currently in clinical trials for its Hedgehog-inhibitory activity. In a similar manner, ameloblastoma cells harboring an activating BRAF mutation encoding p.Val600Glu are sensitive to the BRAF inhibitor vemurafenib. Our findings establish a new paradigm for the diagnostic classification and treatment of ameloblastomas.