Endocrine resistance is a major challenge in the management of estrogen receptor (ER)-positive breast cancers. Although multiple mechanisms leading to endocrine resistance have been proposed, the poor outcome of patients developing resistance to endocrine therapy warrants additional studies. Here we show that noncanonical Hedgehog (Hh) signaling is an alternative growth promoting mechanism that is activated in tamoxifen-resistant tumors. Importantly, phosphoinositide 3-kinase inhibitor/protein kinase B (PI3K/AKT) pathway plays a key role in regulating Hh signaling by protecting key components of this pathway from proteasomal degradation. The levels of Hh-signaling molecules SMO and GLI1 and the targets were significantly elevated in tamoxifen-resistant MCF-7 cells and T47D cells. Serial passage of the resistant cells in mice resulted in aggressive tumors that metastasized to distant organs with concurrent increases in Hh marker expression and epithelial mesenchymal transition. RNAi-mediated depletion of SMO or GLI1 in the resistant cells resulted in reduced proliferation, clonogenic survival and delayed G(1)-S transition. Notably, treatment of resistant cells with PI3K inhibitors decreased SMO and GLI1 protein levels and activity that was rescued upon blocking GSK3β and proteasomal degradation. Furthermore, treatment of tamoxifen-resistant xenografts with anti-Hh compound GDC-0449 blocked tumor growth in mice. Importantly, high GLI1 expression correlated inversely with disease-free and overall survival in a cohort of 315 patients with breast cancer. In summary, our results describe a signaling event linking PI3K/AKT pathway with Hh signaling that promotes tamoxifen resistance. Targeting Hh pathway alone or in combination with PI3K/AKT pathway could therefore be a novel therapeutic option in treating endocrine-resistant breast cancer.