Nonalcoholic fatty liver disease (NAFLD) encompasses a spectrum of obesity-associated liver diseases and it has become the major cause of cirrhosis in the Western world. The high prevalence of NAFLD-associated advanced liver disease reflects both the high prevalence of obesity-related fatty liver (hepatic steatosis) and the lack of specific treatments to prevent hepatic steatosis from progressing to more serious forms of liver damage, including nonalcoholic steatohepatitis (NASH), cirrhosis, and primary liver cancer. The pathogenesis of NAFLD is complex, and not fully understood. However, compelling evidence demonstrates that dysregulation of the hedgehog (Hh) pathway is involved in both the pathogenesis of hepatic steatosis and the progression from hepatic steatosis to more serious forms of liver damage. Inhibiting hedgehog signaling enhances hepatic steatosis, a condition which seldom results in liver-related morbidity or mortality. In contrast, excessive Hh pathway activation promotes development of NASH, cirrhosis, and primary liver cancer, the major causes of liver-related deaths. Thus, suppressing excessive Hh pathway activity is a potential approach to prevent progressive liver damage in NAFLD. Various pharmacologic agents that inhibit Hh signaling are available and approved for cancer therapeutics; more are being developed to optimize the benefits and minimize the risks of inhibiting this pathway. In this review we will describe the Hh pathway, summarize the evidence for its role in NAFLD evolution, and discuss the potential role for Hh pathway inhibitors as therapies to prevent NASH, cirrhosis and liver cancer.