The Hedgehog pathway is critical for the development of diverse organs. Misactivation of the Hedgehog pathway can cause developmental abnormalities and cancers, including medulloblastoma, the most common pediatric brain tumor, and basal cell carcinoma, the most common cancer in the United States. Here, we review how basic, translational, and clinical studies of the Hedgehog pathway have helped reveal how cells communicate, how intercellular communication controls development, how signaling goes awry to cause cancer, and how to use targeted molecular agents to treat both inherited and sporadic cancers.