Bone fracture healing is processed through multiple biological stages including the transition from cartilaginous callus to bony callus formation. Because of its specific, temporal and indispensable functions demonstrated by mouse genetic studies, Hedgehog (Hh) signaling is one of the most potent signaling pathways involved in these processes, but the effect of Hh-signaling activation by small compounds on the repair process had not yet been addressed. Here we examined therapeutic effects of local and one shot-administration of the Hh agonist known as smoothened agonist (SAG) on bone fracture healing in a mouse model. A quantitative analysis with three-dimensional micro-computed tomography showed that SAG administration increased the size of both the cartilaginous callus and bony callus at 14 days after the surgery. A histological analysis showed that SAG administration increased the number of cells expressing a proliferation marker and a chondrocyte marker in cartilaginous callus as well as the cells expressing an osteoblast marker in bony callus. These results indicate that the SAG administration resulted in an enhancement of callus formation during bone fracture healing, which is at least in part mediated by an increase in chondrocyte proliferation in cartilaginous callus and the promotion of bone formation in bony callus. Therapeutic strategies with a SAG-mediated protocol may thus be useful for the treatment of bone fractures.