Basal cell carcinoma (BCC) of the skin, the most common malignancy in individuals of mixed European descent, is increasing in incidence due to an aging population and sun exposure habits. The realization that aberrant activation of Hedgehog signaling is a pathognomonic feature of BCC development has opened the way for exciting progress toward understanding BCC biology and translation of this knowledge to the clinic. Genetic mouse models closely mimicking human BCCs have provided answers about the tumor cell of origin, and inhibition of Hedgehog signaling is emerging as a potentially useful targeted therapy for patients with advanced or multiple BCCs that have hitherto lacked effective treatment.