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Hedgehog is a key morphogen regulating embryonic development and tissue repair. Remarkably, when misregulated, it leads to tumorigenesis. Hedgehog signaling is triggered by binding of ligands with transmembrane receptor Ptch and is subsequently mediated by transcriptional effectors belonging to the Gli family, whose functions is tuned by a number of molecular interactions and post-synthetic modifications. The complex of these regulatory circuitries provides a tight control of developmental processes, mainly involving the modulation of genes determining the fate of stem cells. Similarly, Hedgehog regulates cancer stem cells fostering tumorigenesis. To this regard, these processes represent promising targets for novel therapeutic strategies aiming at the control of stemness reactivation and maintenance in cancer.