Cancer arises when a cell accumulates multiple genetic changes that allow it to elude the highly regulated balance between proliferation and apoptosis that an organism employs to suppress inappropriate growth. It has become evident that malignant transformation of a cell or group of cells often involves pathways that are active during normal development but are inappropriately regulated in neoplastic proliferation. Signaling via the Sonic hedgehog pathway is critical to vertebrate development and also appears to play an integral role in the initiation and propagation of some tumors of the muscle, skin and nervous system. Analyses of human tumors have revealed mutations in various components of the Sonic hedgehog signaling pathway that appear to result in the activation of this pathway, as inferred by the increased expression of the transcription factor, Gli1. Interestingly, a proportion of the human tumors and most of those arising in mouse models continue to express the normal Patched allele, suggesting the involvement of additional molecular events in the transformation of the haploinsufficient cells.