Hepatocellular carcinoma (HCC) is the sixth most common malignant tumors and the third leading cause of cancer‐related death worldwide. As an oncogene, Rab23 has been shown to be significantly related to the growth and migration of hepatocellular carcinoma in both in vitro and in vivo studies, but its underlying mechanism remains obscure. In the present study, we examined the effect of inhibiting Rab23 expression on the pathological progression of HCC. The correlation between liver Rab23 gene expression and survival probability in human HCC patients was analyzed using the TCGA database and CPTAC database. Rab23 knockdown hepatocellular carcinoma cell line was generated through lentiviral transduction, then we established a nude HCC xenograft model by subcutaneously implanting the transfected cells. The analysis of gene and protein expression was carried out using Western blot or RT‐qPCR, respectively. Flow cytometry analysis was used to detect the level of apoptosis. The expression levels of key proteins involved in the Sonic Hedgehog (SHH) signaling pathway were assessed. The results showed that HCC patients with low levels of hepatic Rab23 mRNA and protein had a better survival tendency than those with higher levels of Rab23. Cell proliferations were reduced and apoptosis levels were increased after Knocking down Rab23 in HCC cell lines. Furthermore, in vivo studies have demonstrated that suppression of the Rab23 gene results in decreased tumor size, proliferation rate, and reduced levels of SHH‐related proteins Smoothened and GLI‐1. The above results suggest that Rab23 is involved in the pathological progression of HCC as an important regulator of the SHH signaling pathway, which also provides an important research basis for new therapeutic strategies for HCC.