Colorectal cancer (CRC) is one of the most common gastrointestinal cancers worldwide. It is a complicated and often fatal cancer, and is related to a high disease-related mortality. Around 90% of mortalities are caused by the metastasis of CRC. Current treatment statistics shows a less than 5% 5-year survival for patients with metastatic disease. The development and metastasis of CRC involve multiple factors and mechanisms. The Hedgehog (Hh) signaling plays an important role in embryogenesis and somatic development. Abnormal activation of the Hh pathway has been proven to be related to several types of human cancers. The role of Hh signaling in CRC, however, remains controversial. In this review, we will go through previous literature on the Hh signaling and its functions in the formation, proliferation, and metastasis of CRC. We will also discuss the potential of targeting Hh signaling pathway in the treatment, prognosis, and prevention of CRC.