The transcription factor glioma-associated oncogene 1 (Gli1) has been recognized as a very important nuclear executor at the distal end of the Hedgehog (Hh) signal pathway, which has crucial roles in regulating many developmental processes, such as pattern formation, differentiation, proliferation, and apoptosis. Overexpression of patched 1 protein and Gli1 or constitutively active Indian Hedgehog (IHh)-parathyroid hormone-related protein signal pathway may lead to musculoskeletal tumorigenesis. However, for chondrosarcoma few studies have paid close attention to the IHh-Gli1 signal transduction cascade and more work needs to be carried out to fully elucidate Gli1 protein functions. Here we show that the IHh signal pathway was activated in chondrosarcoma, and knocking down the expression of Gli1 attenuated the disturbed IHh signal pathway, which not only suppressed cell proliferation and promoted G2/M cell cycle arrest but also enhanced cell apoptosis by downregulating Bcl-2 and Bcl-xl expression. Furthermore, Gli1 downregulation, not cyclopamine, induced autophagy by regulating mTOR phosphorylation, and inhibition of autophagy prevented Gli1 small interfering RNA-mediated cell death. We also demonstrated that extracellular signal-regulated kinase 1/2 activity may mediate these antiproliferative events induced by Gli1 inhibition. These results indicate that Gli1 inhibition could ultimately provide a promising new approach for chondrosarcoma treatment.