Bone formation is a complex regeneration process that was regulated by many signalling pathways, such as Wnt, Notch, BMP and Hedgehog (Hh). All of these signalling have been demonstrated to participate in the bone repair process. In particular, one promising signalling pathway involved in bone formation and homeostasis is the Hh pathway. According to present knowledge, Hh signalling plays a vital role in the development of various tissues and organs in the embryo. In adults, the dysregulation of Hh signalling has been verified to be involved in bone‐related diseases in terms of osteoarthritis, osteoporosis and bone fracture; and during the repair processes, Hh signalling could be reactivated and further modulate bone formation. In this chapter, we summarize our current understanding on the function of Hh signalling in bone formation and homeostasis. Additionally, the current therapeutic strategies targeting this cascade to coordinate and mediate the osteogenesis process have been reviewed.