Ectoderm-derived mesenchymal stem cells (EMSCs) were used as potential seed cells for bone tissue engineering to treat bone defects due to their capability of rapid proliferation and osteogenic differentiation. Sonic hedgehog (Shh) signaling was reported to play an important role in the development of bone tissue, but its role is not understood. The present study investigated the role of Shh molecule in osteogenic differentiation of rat EMSCs in vitro. Rat EMSCs were isolated form nasal respiratory mucosa and identified with immunofluorescence and analyzed with other methods, including reverse transcriptase polymerase chain reaction (qPCR) and western blotting. EMSCs expressed CD90, CD105, nestin, and vimentin. On the seventh day of osteogenic induction, expression levels of Shh and Gli1 was higher according to the result of qPCR and Western blotting. After induction for 14 days, higher alkaline phosphatase (ALP) activity and more mineralized nodules were seen in comparison to the cells that did not undergo induction. Shh signaling appears to enhance osteogenic differentiation of rat EMSCs, suggesting that Shh signaling directs the lineage differentiation of ectodermal stem cells and represents a promising strategy for skeletal tissue regeneration.