Basal cell carcinoma (BCC) is the most frequent cancer in the white population and its incidence appears to be increasing worldwide. While the majority of BCCs arise sporadically, many cases are attributable to basal cell nevus syndrome, or Gorlin syndrome, an autosomal dominantly inherited disorder characterized by the occurrence of multiple BCCs and by extracutaneous tumors. Genetic studies on patients with basal cell nevus syndrome indicate deregulation of the Hedgehog (Hh) pathway in epidermal keratinocytes as the primary event in the pathogenesis of BCC. This article summarizes the recent progress in understanding Hh-dependent BCC tumorigenesis, as well as evidence for deregulation of other molecular pathways, primarily the Wnt developmental pathway. Understanding the molecular genetics of BCC development has provided new opportunities for molecular therapy of this cancer by targeting Hh and other signaling pathways.