Sonic hedgehog (SHH) signaling pathway promotes the process of angiogenesis, contributing to the growth and progression of many human malignancies including colorectal cancer (CRC), which therefore has become a promising target for cancer chemotherapy. Hedyotis diffusa Willd (HDW), as a well-known traditional Chinese herbal medicine, has long been used in China for the clinic treatment of various cancers. Recently, we reported that HDW can inhibit colorectal cancer growth in vivo and in vitro via suppression of the STAT3 pathway. In addition, we demonstrated the anti-angiogenic activity of HDW in vitro. To further elucidate the mechanism of the tumoricidal activity of HDW, by using a CRC mouse xenograft model we evaluated the in vivo effect of the ethanol extract of HDW (EEHDW) on tumor angiogenesis, and investigated the underlying molecular mechanisms. We found that EEHDW could significantly reduce intratumoral microvessel density (MVD), indicating its activity of antitumor angiogenesis in vivo. EEHDW suppressed the activation of SHH signaling in CRC xenograft tumors since it significantly decreased the expression of key mediators of SHH pathway. EEHDW treatment inhibited the expression of the critical SHH signaling target gene VEGF-A as well as its specific receptor VEGFR2. Taken together, we propose for the first time that Hedyotis diffusa Willd inhibits colorectal cancer growth in vivo via inhibition of SHH-mediated tumor angiogenesis.