We have previously shown that the signaling pathway of the embryonic morphogen Sonic hedgehog (Shh) is recapitulated in the postnatal skeletal muscle in response to ischemia. We have also demonstrated that Shh is an indirect angiogenic agent upregulating various families of angiogenic growth factors and that Shh gene therapy improves angiogenesis and heart function in experimental models of myocardial ischemia. Based on these findings, we hypothesized that Shh gene therapy is beneficial in an experimental model of peripheral ischemia. We found that intramuscular (i.m.) treatment with a plasmid encoding the Shh human gene (phShh) increased blood flow, capillary density, and arteriole density in mice in which peripheral circulation of the hindlimb was disrupted by removal of the common femoral artery. Shh gene therapy also enhanced vasculogenesis, by increasing the number of circulating bone marrow (BM)-derived endothelial precursors and improving the contribution of these cells to the process of neovascularization. Finally, phShh treatment induced upregulation of prototypical angiogenic, arteriogenic, and vasculogenic factors, such as vascular endothelial growth factor (VEGF), angiopoietin 1 (Ang-1), and stromal cell-derived factor-1 (SDF-1α). These data suggest that Shh gene therapy merits further investigation for its ability to trigger the expression of potent trophic factors and stimulate pleiotropic aspects of neovascularization in the setting of ischemia.