Platelet-derived growth factor (PDGF) is known to induce phenotypic switching of vascular smooth muscle cells (VSMCs) from contractile to a pathological synthetic state, which played an essential role in proliferation of VSMCs. Sonic hedgehog (Shh) contributes to the proliferation of VSMCs when induced by PDGF. Here, we investigated the probable role of Shh in PDGF-induced VSMC dedifferentiation and its underlying mechanisms. We found that PDGF stimulated Shh expression in VSMCs, which was mediated by activation of PDGFRβ/ERK1/2 cell signaling pathway. Further, we found PDGF-induced VSMC phenotypic modulation was accompanied by up-regulation of Shh/Gli family zinc finger 2 (Gli2) signaling and Krüppel-like factor 4 (KLF4). When inhibited Shh in the presence of PDGF, the expressions of KLF4 and VSMC dedifferentiation markers were down-regulated and the effect of PDGF in inducing VSMC dedifferentiation was blocked. In the absence of PDGF, Shh signaling activation increased the expression of KLF4 and promoted VSMC dedifferentiation. The results indicate Shh participated in the regulation of PDGF-induced VSMC dedifferentiation. Finally, we found that KLF4 was closely involved in this process. On inhibition of KLF4, PDGF induced VSMC dedifferentiation was abrogated, even in the presence of Shh. Taken together, the results provide critical insights into the newly discovered role of Shh in phenotypic modulation of VSMCs which depends on KLF4.