Multiple lines of evidence suggest that the Sonic Hedgehog (Shh) signaling pathway is aberrantly reactivated in pancreatic cancer stem cells (CSCs). The objectives of this study were to examine the molecular mechanisms by which GANT-61 (Gli transcription factor inhibitor) regulates stem cell characteristics and tumor growth. Effects of GANT-61 on CSC’s viability, spheroid formation, apoptosis, DNA-binding and transcriptional activities, and epithelial–mesenchymal transition (EMT) were measured. Humanized NOD/SCID/IL2R gamma^null mice were used to examine the effects of GANT-61 on CSC’s tumor growth. GANT-61 inhibited cell viability, spheroid formation, and Gli–DNA binding and transcriptional activities, and induced apoptosis by activation of caspase-3 and cleavage of Poly-ADP ribose Polymerase (PARP). GANT-61 increased the expression of TRAIL-R1/DR4, TRAIL-R2/DR5 and Fas, and decreased expression of PDGFRα and Bcl-2. GANT-61 also suppressed EMT by up-regulating E-cadherin and inhibiting N-cadherin and transcription factors Snail, Slug and Zeb1. In addition, GANT-61 inhibited pluripotency maintaining factors Nanog, Oct4, Sox-2 and cMyc. Suppression of both Gli1 plus Gli2 by shRNA mimicked the changes in cell viability, spheroid formation, apoptosis and gene expression observed in GANT-61-treated pancreatic CSCs. Furthermore, GANT-61 inhibited CSC tumor growth which was associated with up-regulation of DR4 and DR5 expression, and suppression of Gli1, Gli2, Bcl-2, CCND2 and Zeb1 expression in tumor tissues derived from NOD/SCID IL2Rγ null mice. Our data highlight the importance of Shh pathway for self-renewal and metastasis of pancreatic CSCs, and also suggest Gli as a therapeutic target for pancreatic cancer in eliminating CSCs.