The sonic hedgehog (SHH) pathway is activated in several types of malignancy and plays an important role in tumor cell proliferation and tumorigenesis. SHH binding to a 12-pass transmembrane receptor, Patched (PTCH), leads to freeing of Smoothened (SMO) and subsequent activation of GLI transcription factors. In the present study, we analyzed the expression of SHH, PTCH, SMO, and GLI1 in 31 follicular thyroid adenomas (FTA), 8 anaplastic thyroid carcinomas (ATC), and 51 papillary thyroid carcinomas (PTC) by immunohistochemical staining. More than 65% of FTA, PTC, and ATC specimens stained positive for SHH, PTCH, SMO, and GLI. However, the expression of the genes encoding these four molecules did not correlate with any clinicopathologic parameters, including the age, gender, the status of BRAF gene mutation, tumor stage, local invasion, and metastasis. Three thyroid tumor cell lines (KAT-18, WRO82, and SW1736) all expressed the genes encoding these four molecules. 5-Bromo-2-deoxyuridine labeling and MTT cell proliferation assays revealed that cyclopamine (CP), an inhibitor of the SHH pathway, was able to inhibit the proliferation of KAT-18 and WRO82 cells more effectively than SW1736 cells. CP led to the arrest of cell cycle or apoptosis. Knockdown of SHH and GLI expression by miRNA constructs that target SHH or GLI mRNA in KAT-18 and SW1736 cells led to the inhibition of cell proliferation. Our results suggest that the SHH pathway is widely activated in thyroid neoplasms and may have potential as an early marker of thyroid cancer or as a potential therapeutic target for thyroid cancer treatment.