Hedgehog signaling has an essential role in the control of stem cell growth in embryonic tissues. Therefore, this study examined the effect of sonic hedgehog (Shh) on the self-renewal of mouse embryonic stem (ES) cells and its related mechanisms. Shh increased DNA synthesis blocked by the inhibition of the smoothened receptor. Shh required Gli1 activation to induce the increases in Notch/Hes-1 and Wnt/beta-catenin. Shh increased the intracellular calcium concentration ([Ca(2+)](i)) and protein kinase C (PKC) activity. We show that the Shh-induced increase in the Gli1 mRNA level requires [Ca(2+)](i) and PKC. Shh increased the phosphorylation of epidermal growth factor receptor (EGFR), which is blocked by the matrix metalloproteinase inhibitor. Subsequently, Shh increased the nuclear factor (NF)-kappaB p65 phosphorylation, which was inhibited by blocking PKC and EGFR tyrosine kinase. Shh also increased the level of the cell cycle regulatory proteins in a dose-dependent manner. However, Shh decreased the levels of the cyclin-dependent kinase inhibitory proteins. The effect of Shh on these proteins was inhibited by blocking PKC, EGFR, and NF-kappaB as well as transfection of Gli1 small interfering RNA (siRNA). Finally, Shh-induced progression of the G1/S-phase was blocked by the inhibition of PKC and EGFR tyrosine kinase. In conclusion, Shh stimulates mouse ES cell proliferation through Gli1 activation as well as Ca(2+)/PKC and EGFR. Disclosure of potential conflicts of interest is found at the end of this article.