Medulloblastoma is a cerebellar tumor that can arise through aberrant activation of Sonic hedgehog (Shh) signaling, which normally regulates cerebellar granule cell proliferation. Mutations of the Shh receptor PATCHED (PTCH) are associated with medulloblastomas, which have not been found to have loss of PTCH heterozygosity. We address whether patched (Ptc) heterozygosity fundamentally alters granule cell differentiation and contributes to tumorigenesis by increasing proliferation and/or decreasing apoptosis in Ptc+/- mice. Our data show that postnatal Ptc+/- mouse granule cell precursor growth is not globally altered. However, many older Ptc+/- mice display abnormal cerebellar regions containing persistently proliferating granule cell precursors. Since fewer Ptc+/- mice form medulloblastomas, these granule cell rests represent a developmentally disrupted, but uncommitted stage of tumorigenesis. Although Ptc+/- mouse medulloblastomas express neurodevelopmental genes, they diverge from granule cell differentiation in their discordant coexpression of postmitotic markers despite their ongoing growth. Like human medulloblastomas, mouse tumors with reduced levels of the neurotrophin-3 receptor, trkC/Ntrk3, display decreased apoptosis in vivo, illustrating the role of TrkC in regulating tumor cell survival. These results indicate that Ptc heterozygosity contributes to tumorigenesis by predisposing a subset of granule cell precursors to the formation of proliferative rests and subsequent dysregulation of developmental gene expression.