Hepatic stellate cells (HSC) have a complex phenotype that includes both neural and myofibroblastic features. The Hedgehog (Hh) pathway has been shown to direct the fate of neural and myofibroblastic cells during embryogenesis and during tissue remodeling in adults. Therefore, we hypothesized that Hh signaling may regulate the fate of HSC in adults. In this study, we find that freshly isolated stellate cells from adult Patched-lacZ transgenic mice exhibit beta-galactosidase activity, indicating Hh pathway activity. Transcripts of Hh ligands, the Hh pathway receptor, and Hh-regulated transcription factors are expressed by stellate cells from mice, rats, and humans. Transfection experiments in a cell line using a Hh-inducible luciferase reporter demonstrate constitutive Hh pathway activity. Moreover, neutralizing antibodies to Hh increase apoptosis, while viability is restored by treatment with Hh ligand. In vitro treatment of primary stellate cells with cyclopamine (Cyc), a pharmacologic inhibitor of the Hh pathway, inhibits activation and slightly decreases cell survival, while a single injection of Cyc into healthy adult mice reduces activation of HSC by more than 50% without producing obvious liver damage. Our findings reveal a novel mechanism, namely the Hh pathway, that regulates the activation and viability of HSC.