Melanoma is one of the most aggressive types of human cancer, characterized by enhanced heterogeneity and resistance to conventional therapy at advanced stages. We and others have previously shown that HEDGEHOG-GLI (HH-GLI) signaling is required for melanoma growth and for survival and expansion of melanoma-initiating cells (MICs). Recent reports indicate that HH-GLI signaling regulates a set of genes typically expressed in embryonic stem cells, including SOX2 (sex-determining region Y (SRY)-Box2). Here we address the function of SOX2 in human melanomas and MICs and its interaction with HH-GLI signaling. We find that SOX2 is highly expressed in melanoma stem cells. Knockdown of SOX2 sharply decreases self-renewal in melanoma spheres and in putative melanoma stem cells with high aldehyde dehydrogenase activity (ALDH(high)). Conversely, ectopic expression of SOX2 in melanoma cells enhances their self-renewal in vitro. SOX2 silencing also inhibits cell growth and induces apoptosis in melanoma cells. In addition, depletion of SOX2 progressively abrogates tumor growth and leads to a significant decrease in tumor-initiating capability of ALDH(high) MICs upon xenotransplantation, suggesting that SOX2 is required for tumor initiation and for continuous tumor growth. We show that SOX2 is regulated by HH signaling and that the transcription factors GLI1 and GLI2, the downstream effectors of HH-GLI signaling, bind to the proximal promoter region of SOX2 in primary melanoma cells. In functional studies, we find that SOX2 function is required for HH-induced melanoma cell growth and MIC self-renewal in vitro. Thus SOX2 is a critical factor for self-renewal and tumorigenicity of MICs and an important mediator of HH-GLI signaling in melanoma. These findings could provide the basis for novel therapeutic strategies based on the inhibition of SOX2 for the treatment of a subset of human melanomas.