Conserved embryonic signaling pathways such as Hedgehog (Hh), Wingless and Notch have been implicated in the pathogenesis of several malignancies. Recent data suggests that Hh signaling plays a role in normal B-cell development, and we hypothesized that Hh signaling may be important in precursor B-cell acute lymphocytic leukemia (B-ALL). We found that the expression of Hh pathway components was common in human B-ALL cell lines and clinical samples. Moreover, pathway activity could be modulated by Hh ligand or several pathway inhibitors including cyclopamine and the novel SMOOTHENED (SMO) inhibitor IPI-926. The inhibition of pathway activity primarily impacted highly clonogenic B-ALL cells expressing aldehyde dehydrogenase (ALDH) by limiting their self-renewal potential both in vitro and in vivo. These data demonstrate that Hh pathway activation is common in B-ALL and represents a novel therapeutic target regulating self-renewal and persistence of the malignant clone.