Sonic hedgehog (SHH) and insulin-like growth factor (IGF) signaling are essential for development of many tissues and are implicated in medulloblastoma, the most common solid pediatric malignancy. Cerebellar granule neuron precursors (CGNPs), proposed cells-of-origin for specific classes of medulloblastomas, require SHH and IGF signaling for proliferation and survival during development of the cerebellum. We asked whether SHH regulates IGF pathway components in proliferating CGNPs. We report that SHH-treated CGNPs showed increased levels of insulin receptor substrate 1 (IRS1) protein, which was also present in the germinal layer of the developing mouse cerebellum and in mouse SHH-induced medulloblastomas. Previous roles for IRS1, an oncogenic protein that is essential for IGF-mediated proliferation in other cell types, have not been described in SHH-mediated CGNP proliferation. We found that IRS1 overexpression can maintain CGNP proliferation in the absence of SHH. Furthermore, lentivirus-mediated knock down experiments have shown that IRS1 activity is required for CGNP proliferation in slice explants and dissociated cultures. Contrary to traditional models for SHH signaling that focus on gene transcription, SHH stimulation does not regulate Irs1 transcription but rather stabilizes IRS1 protein by interfering with mTOR-dependent IRS1 turnover and possibly affects Irs1 mRNA translation. Thus, we have identified IRS1 as a novel effector of SHH mitogenic signaling that may serve as a future target for medulloblastoma therapies. Our findings also indicate a previously unreported interaction between the SHH and mTOR pathways, and provide an example of a non-classical means for SHH-mediated protein regulation during development.