Hedgehog pathway regulates tissue patterning and cell proliferation. Gli1 transcription factor is the major effector of Hedgehog signaling and its deregulation is often associated to medulloblastoma formation. Proteolytic processes represent a critical mechanism by which this pathway is turned off. Here, we characterize the regulation of an ubiquitin-mediated mechanism of Gli1 degradation, promoted by the coordinated action of the E3 ligase Itch and the adaptor protein Numb. We show that Numb activates the catalytic activity of Itch, releasing it from an inhibitory intramolecular interaction between its homologous to E6-AP C-terminus and WW domains. The consequent activation of Itch, together with the recruitment of Gli1 through direct binding with Numb, allows Gli1 to enter into the complex, resulting in Gli1 ubiquitination and degradation. This process is mediated by a novel Itch-dependent degron, composed of a combination of two PPXYs and a phospho-serine/proline motifs, localized in Gli1 C-terminal region, indicating the role of two different WW docking sites in Gli1 ubiquitination. Remarkably, Gli1 protein mutated in these modules is no longer regulated by Itch and Numb, and determines enhanced Gli1-dependent medulloblastoma growth, migration and invasion abilities, as well as in vitro transforming activity. Our data reveal a novel mechanism of regulation of Gli1 stability and function, which influences Hedgehog/Gli1 oncogenic potential.