Hedgehog\smoothened signaling is active in a variety of tumors and is also involved in the maintenance of normal stem cells in vivo. We evaluated the possibility of preferential affection of tumor versus normal cells following inhibition of this signaling. We applied a cream preparation of cyclopamine (an inhibitor of the hedgehog\smoothened signaling) onto skin tumors in patients who were scheduled for the excision of these tumors (four basal cell carcinomas and a trichoepithelioma in four unrelated patients). All of the cyclopamine‐treated tumors regressed rapidly. Histological and immunohistochemical analyses showed inhibition of the proliferation and highly efficient induction of the differentiation and apoptosis of tumor cells by a non‐genotoxic mechanism. No adverse effects were noted and normal skin tissue and putative stem cells that were exposed to cyclopamine together with tumors were well preserved under the conditions we describe. Our findings show selective and highly efficient induction of the differentiation and apoptosis of tumor cells in vivo by transient inhibition of the hedgehog\smoothened signaling and provide a rational cancer therapy.