The aberrant activation of sonic hedgehog (SHH) pathway contributes to initiation and progression of various malignancies. However, the roles and underlying mechanisms of SHH signaling pathway in invasion and metastasis of liver cancer have not been well understood. In this study, we found that SHH signaling was activated and correlated with invasion and metastasis in hepatocellular carcinoma (HCC). Enhanced SHH signaling by recombinant human SHH N-terminal peptide (rSHH-N) promoted hepatoma cell adhesion, migration and invasion, whereas blockade of SHH signaling with SHH neutralizing antibody or cyclopamine suppressed hepatoma cell adhesion, migration and invasion. Furthermore, matrix metalloproteinase (MMP)-2 and MMP-9 expressions and activities were upregulated and downregulated by rSHH-N and SHH signaling inhibitor, respectively. The rSHH-N-mediated hepatoma cell migration and invasion was blocked by MMP-specific inhibitors or neutralizing antibodies to MMP-2 and MMP-9. In addition, phosphorylations of AKT and focal adhesion kinase (FAK) were increased and decreased by rSHH-N and SHH signaling inhibitor, respectively. Further investigations showed that activation of AKT and FAK were required for rSHH-N-mediated upregulation of MMP-2 and MMP-9, cell migration and invasion. Finally, we found that SHH protein expression was positively correlated with phosphorylatd FAK Tyr397, phosphorylatd AKT Ser473, MMP-2 and MMP-9 protein expressions in HCC samples. Taken together, our findings suggest that SHH pathway induces cell migration and invasion through FAK/AKT signaling-mediated MMP-2 and MMP-9 production and activation in liver cancer.