Non-small cell lung cancer (NSCLC) patients have very low survival rates because the current therapeutic strategies are not fully effective. Although EGFR tyrosine kinase inhibitors are effective for NSCLC patients harboring EGFR mutations, patients invariably develop resistance to these agents. Alterations in multiple signaling cascades have been associated with the development of resistance to EGFR inhibitors. Sonic Hedgehog and associated Gli transcription factors play a major role in embryonic development and have recently been found to be reactivated in NSCLC, and elevated Gli1 levels correlate with poor prognosis. The Hedgehog pathway has been implicated in the functions of cancer stem cells, although the underlying molecular mechanisms are not clear. In this context, we demonstrate that Gli1 is a strong regulator of embryonic stem cell transcription factor Sox2. Depletion of Gli1 or inhibition of the Hedgehog signaling significantly abrogated the self-renewal of stem-like side-population cells from NSCLCs as well as vascular mimicry of such cells. Gli1 was found to transcriptionally regulate Sox2 through its promoter region, and Gli1 could be detected on the Sox2 promoter. Inhibition of Hedgehog signaling appeared to work cooperatively with EGFR inhibitors in markedly reducing the viability of NSCLC cells as well as the self-renewal of stem-like cells. Thus, our study demonstrates a cooperative functioning of the EGFR signaling and Hedgehog pathways in governing the stem-like functions of NSCLC cancer stem cells and presents a novel therapeutic strategy to combat NSCLC harboring EGFR mutations.