Medulloblastoma tumorigenesis caused by inactivating mutations in the PATCHED1 (PTCH1) gene is initiated by persistently activated Sonic Hedgehog (Shh) signaling in granule neuron precursors (GNPs) during the late stages of cerebellar development. Both normal cerebellar development and Shh-driven medulloblastoma tumorigenesis require N-Myc expression. However, the mechanisms by which N-Myc affects the stages of medulloblastoma initiation and progression are unknown. Here we used a mouse model of Ptch1 heterozygosity and medulloblastoma to show that increased N-Myc expression characterized the earliest selection of focal GNP hyperplasia destined for later tumor progression. Step-wise loss of Ptch1 expression, from tumor initiation to progression, led to incremental increases in N-Myc protein, rather than mRNA, expression. Increased N-Myc resulted in enhanced proliferation and death resistance of perinatal GNPs at tumor initiation. Sequential N-Myc protein phosphorylation at serine-62 and serine-62/threonine-58 characterized the early and late stages of medulloblastoma tumorigenesis, respectively. Shh pathway activation led to increased Myc protein stability and reduced expression of key regulatory factors. Taken together our data identify N-Myc protein stability as the result of loss of Ptch1, which distinguishes normal cerebellar development from medulloblastoma tumorigenesis.