Exposure to the environmental toxicant arsenic, through both contaminated water and food, contributes to significant health problems worldwide. In particular, arsenic exposure is thought to function as a carcinogen for lung, skin, and bladder cancer via mechanisms that remain largely unknown. More recently, the Hedgehog signaling pathway has also been implicated in the progression and maintenance of these same cancers. Based on these similarities, we tested the hypothesis that arsenic may act in part through activating Hedgehog signaling. Here, we show that arsenic is able to activate Hedgehog signaling in several primary and established tissue culture cells as well as in vivo. Arsenic activates Hedgehog signaling by decreasing the stability of the repressor form of GLI3, one of the transcription factors that ultimately regulate Hedgehog activity. We also show, using tumor samples from a cohort of bladder cancer patients, that high levels of arsenic exposure are associated with high levels of Hedgehog activity. Given the important role Hedgehog signaling plays in the maintenance and progression of a variety of tumors, including bladder cancer, these results suggest that arsenic exposure may in part promote cancer through the activation of Hedgehog signaling. Thus, we provide an important insight into the etiology of arsenic-induced human carcinogenesis, which may be relevant to millions of people exposed to high levels of arsenic worldwide.