Abstract The activation of Hedgehog (Hh) signaling has been implicated in the growth of various tumor types, including gastric carcinoma. However, the precise mechanisms of Hh activation and suppression of tumor growth by the blockade of Hh signaling in gastric carcinoma cells remain unknown. The aim of this study was to elucidate the mechanism of abnormal Hh signaling and the key molecules contributing to dysregulated growth of gastric carcinoma. The Sonic hedgehog (Shh) ligand and its receptor Patched were expressed in all five gastric carcinoma cell lines examined (MKN1, MKN7, MKN45, MKN74, and AGS cells). The blockade of Hh signaling with anti-Shh antibody inhibited the growth of all five gastric carcinoma cell lines. Shh was overexpressed (mean, 12.8-fold) in 8 of 14 (57.0%) cancerous tissue samples from patients with gastric carcinoma as compared with expression in the surrounding noncancerous tissues. The disruption of glioma-associated oncogene 1 (Gli1) by small interfering RNA induced an increase in p21/cyclin-dependent kinase–interacting protein 1 (CIP1), interfered with the G1-S transition, and suppressed cell proliferation. The stimulation or inhibition of Hh signaling did not affect p53 activity and the induction of p21/CIP1 expression and the G1 arrest by inhibition of Hh signaling were not affected by the p53 status. These findings suggest that the overexpression of Shh contributes to constitutive Hh activation and that this signaling pathway negatively regulates p21/CIP1 through a Gli1-dependent and p53-independent mechanism in gastric carcinoma cells.