Regulated protein destruction controls many key cellular processes with aberrant regulation increasingly found during carcinogenesis. Gli proteins mediate the transcriptional effects of the Sonic hedgehog pathway, which is implicated in up to 25% of human tumors. Here we show that Gli is rapidly destroyed by the proteasome and that mouse basal cell carcinoma induction correlates with Gli protein accumulation. We identify two independent destruction signals in Gli1, D_N and D_C, and show that removal of these signals stabilizes Gli1 protein and rapidly accelerates tumor formation in transgenic animals. These data argue that control of Gli protein accumulation underlies tumorigenesis and suggest a new avenue for antitumor therapy.