Medulloblastoma is the most common malignant brain tumor in children. It is thought to result from the transformation of granule cell precursors (GCPs) in the developing cerebellum, but little is known about the early stages of the disease. Here, we identify a pre-neoplastic stage of medulloblastoma in patched heterozygous mice, a model of the human disease. We show that pre-neoplastic cells are present in the majority of patched mutants, although only 16% of these mice develop tumors. Pre-neoplastic cells, like tumor cells, exhibit activation of the Sonic hedgehog pathway and constitutive proliferation. Importantly, they also lack expression of the wild-type patched allele, suggesting that loss of patched is an early event in tumorigenesis. Although pre-neoplastic cells resemble GCPs and tumor cells in many respects, they have a distinct molecular signature. Genes that mark the pre-neoplastic stage include regulators of migration, apoptosis and differentiation, processes crucial for normal development but previously unrecognized for their role in medulloblastoma. The identification and molecular characterization of pre-neoplastic cells provides insight into the early steps in medulloblastoma formation, and may yield important markers for early detection and therapy of this disease.