The Hedgehog (Hh) pathway is required for cell-fate determination during the embryonic life, as well as cell growth and differentiation in the adult organism, where the inappropriate activation has been implicated in several cancers. Here we demonstrate that Hh signaling plays a significant role in growth and survival of multiple myeloma (MM) cells. We observed that CD138(+) MM cells express Hh genes and confirmed Smoothened (Smo)-dependent Hh signaling in MM using a novel synthetic Smo inhibitor, NVP-LDE225 (Novartis), which decreased MM cell viability by inducing specific down-regulation of Gli1 and Ptch1, hallmarks of Hh activity. In addition, we detected a nuclear localization of Gli1 in MM cells, which is completely abrogated by Forskolin, a Gli1-modulating compound, confirming Smo-independent mechanisms leading to Hh activation in MM. Finally, we identified that bone marrow stromal cells are a source of the Shh ligand, although they are resistant to the Hh inhibitor because of defective Smo expression and Ptch1 up-regulation. Further in vitro as well as in vivo studies showed antitumor efficacy of NVP-LDE225 in combination with bortezomib. Altogether, our data demonstrate activation of both canonical and noncanonical Hh pathway in MM, thus providing the rationale for testing Hh inhibitors in clinical trials to improve MM patient outcome.