During fetal prostate development, Sonic hedgehog (Shh) expression by the urogenital sinus epithelium activates Gli-1 expression in the adjacent mesenchyme and promotes outgrowth of the nascent ducts. Shh signaling is down-regulated at the conclusion of prostate ductal development. However, a survey of adult human prostate tissues reveals substantial levels of Shh signaling in normal, hyperplasic, and malignant prostate tissue. In cancer specimens, the Shh expression is localized to the tumor epithelium, whereas Gli-1 expression is localized to the tumor stroma. Tight correlation between the levels of Shh and Gli-1 expression suggests active signaling between the tissue layers. To determine whether Shh-Gli-1 signaling could be functionally important for tumor growth and progression, we performed experiments with the LNCaP xenograft tumor model and demonstrated that: 1) Shh expressed by LNCaP tumor cells activates Gli-1 expression in the tumor stroma, 2) genetically engineered Shh overexpression in LNCaP cells leads to increased tumor stromal Gli-1 expression, and 3) Shh overexpression dramatically accelerates tumor growth. These data suggest that hedgehog signaling from prostate cancer cells to the stroma can elicit the expression of paracrine signals, which promote tumor growth.