BACKGROUND Pancreatic cancer is an aggressive malignancy with a poor prognosis. The overall 5-year survival rate of pancreatic cancer is less than 5%, and has not improved significantly for years. Further understanding of the molecular carcinogenesis of pancreatic cancer is critical for designing effective ways to treat this type of malignancy. METHODS In this study, we examine expression of hedgehog signaling molecules in 54 surgically removed pancreatic cancer specimens as well as seven available pancreatic cancer cell lines. RESULTS We find that expression of Ptch is associated with tumor size, tumor differentiation, lymph node metastasis, and clinical stages, whereas expression of Smo is associated with tumor differentiation and lymph node metastasis. Our studies from pancreatic cancer cell lines indicate that targeted inhibition of hedgehog signaling by Smo signaling inhibitor KAAD-cyclopamine causes hedgehog target gene expression (Gli1) suppression, induces P21 expression and G1 cell population, and reduced expression of Cyclin D1 and IGF2. CONCLUSIONS These results indicate that hedgehog signaling activation is a very common event in pancreatic cancer and that targeted inhibition of hedgehog signaling may be effective in treatment of pancreatic cancer.