Hedgehog (Hh) is a developmental signaling pathway in which Hh ligands bind Patched (Ptch), which relieves its inhibition of Smoothened (Smo), allowing the Gli family of transcription factors to translocate to the nucleus and activate Hh target genes. The role of Hh signaling in hematopoiesis is controversial and ill defined. Although some groups observed self-renewal defects with decreased replating and reduced efficiency of secondary murine transplants, other groups reported no hematopoietic phenotypes, which may be related to the timing of Hh abrogation. In malignant hematopoiesis, most attention has been focused on the role of Hh signaling in chronic myeloid leukemia (CML), considered by many to be a stem cell disorder that bears the constitutively active BCR-ABL tyrosine kinase. Despite the elimination of most leukemia cells through BCR-ABL inhibition, most patients remain PCR positive, suggesting that the putative CML stem cell may be resistant to kinase antagonism. Groups are now exploring the Hh pathway as an alternate pathway supporting CML stem cell survival. Knockdown or inhibition of Smo abrogates or delays the appearance of CML in several in vitro and in vivo models. These data have lead to clinical trials using BCR-ABL kinase and novel Smo inhibitors in combination.