The Hedgehog (Hh) pathway is a conserved signalling system essential for embryonic development and for the maintenance of self-renewal pathways in progenitor cells. Mutations that deregulate Hh signalling are directly implicated in basal cell carcinoma and medulloblastoma. The mechanisms of Hh pathway activation in cancers in which no pathway mutations have been identified are less clear, but of great translational significance. Small molecule inhibitors of the pathway, many of which are in early phase clinical trials, may shed further light on this question. Canonical Hh signalling promotes the expression of target genes through the Glioma-associated oncogene (GLI) transcription factors. There is now increasing evidence suggesting that ‘non-canonical’ Hh signalling mechanisms, some of which are independent of GLI-mediated transcription, may be important in cancer and development. The focus of this review is to summarise some of the known mechanisms of Hh signalling as well as its emerging role in cancer.