Helicobacter pylori (H. pylori) is the major risk factor for the development of gastric cancer. Our laboratory has reported that the Sonic Hedgehog (Shh) signaling pathway is an early response to infection that is fundamental to the initiation of H. pylori-induced gastritis. H. pylori also induces programmed death ligand 1 (PD-L1) expression on gastric epithelial cells, yet the mechanism is unknown. We hypothesize that H. pylori-induced PD-L1 expression within the gastric epithelium is mediated by the Shh signaling pathway during infection. To identify the role of Shh signaling as a mediator of H. pylori-induced PD-L1 expression, human gastric organoids generated from either induced pluripotent stem cells (HGOs) or tissue (huFGOs) were microinjected with bacteria and treated with Hedgehog/Gli inhibitor GANT61. Gastric epithelial monolayers generated from the huFGOs were also infected with H. pylori and treated with GANT61 to study the role of Hedgehog signaling as a mediator of induced PD-1 expression. A patient-derived organoid/autologous immune cell co-culture system infected with H. pylori and treated with PD-1 inhibitor (PD-1Inh) was developed to study the protective mechanism of PD-L1 in response to bacterial infection. H. pylori significantly increased PD-L1 expression in organoid cultures 48 hours post-infection when compared to uninfected controls. The mechanism was cytotoxic associated gene A (CagA) dependent. This response was blocked by pretreatment with GANT61. Anti-PD-L1 treatment of H. pylori infected huFGOs, co-cultured with autologous patient cytotoxic T lymphocytes and dendritic cells, induced organoid death. H. pylori-induced PD-L1 expression is mediated by the Shh signaling pathway within the gastric epithelium. Cells infected with H. pylori that express PD-L1 may be protected from the immune response, creating premalignant lesions progressing to gastric cancer.