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Hedgehog (Hh) signaling regulates embryonic patterning and organ morphogenesis. It is also involved in regeneration and repair of tissues. Aberrant Hh pathway activation is a feature of many human malignancies. Classical Hh signaling is activated by Hh ligands that can signal in an autocrine or paracrine manner generating a tumor-stromal crosstalk. In contrast to canonical Hh signaling that culminates in the activation of GLI transcription factors, “noncanonical” Hh signaling does not involve GLI transcriptional activity. Several Hh pathway inhibitors have progressed to clinical trials, where the outcomes have not been very encouraging in many solid tumors. Here we discuss the likely role of “nonclassical” Hh-GLI signaling that is activated by growth factors and cytokines from the tumor and/or its microenvironment; these uncouple Hh signaling from the vital regulatory protein Smoothened, and result in the activation of GLI. While efforts are being made to target tumor-intrinsic Hh targets, it is imperative to acknowledge the role of the complex molecular networks and crosstalk between different components of the tumor microenvironment that can result in the emergence of resistance to conventional Hh therapy. These considerations have an important bearing on appreciating the need to mitigate the effects of tumor microenvironment to combat resistance to Hh inhibitors.