Keratocystic odontogenic tumor (KCOT) arises as part of Gorlin syndrome (GS) or as a sporadic lesion. Gene mutations and loss of heterozygosity (LOH) of the hedgehog receptor PTCH1 plays an essential role in the pathogenesis of KCOT. However, some KCOT cases lack evidence for gene alteration of PTCH1, suggesting that other genes in the hedgehog pathway may be affected. PTCH2 and SUFU participate in the occurrence of GS-associated tumors, but their roles in KCOT development are unknown. To elucidate the roles of these genes, we enrolled 36 KCOT patients in a study to sequence their entire coding regions of PTCH1, PTCH2 and SUFU. LOH and immunohistochemical expression of these genes, as well as the downstream targets of hedgehog signaling, were examined using surgically-excised KCOT tissues. PTCH1 mutations, including four novel ones, were found in 9 hereditary KCOT patients, but not in sporadic KCOT patients. A pathogenic mutation of PTCH2 or SUFU was not found in any patients. LOH at PTCH1 and SUFU loci correlated with the presence of epithelial budding. KCOT harboring a germline mutation (Type 1) showed nuclear localization of GLI2 and frequent histological findings such as budding and epithelial islands, as well as the highest recurrence rate. KCOT with LOH but without a germline mutation (Type 2) less frequently showed these histological features, and the recurrence rate was lower. KCOT with neither germline mutation nor LOH (Type 3) consisted of two subgroups, Type 3A and 3B, which were characterized by nuclear and cytoplasmic GLI2 localization, respectively. Type 3B rarely exhibited budding and recurrence, behaving as the most amicable entity. The expression patterns of CCND1 and BCL2 tended to correlate with these subgroups. Our data indicates a significant role of PTCH1 and SUFU in the pathogenesis of KCOT, and the genotype-oriented subgroups constitute entities with different potential aggressiveness.