Hedgehog (Hh) signaling is a principal component of the morphogenetic code best known to direct pattern formation during embryogenesis. The Hh pathway remains active in adulthood however where it guides tissue regeneration and remodeling and Hh production in the niche plays an important role in maintaining stem cell compartment size. Deregulated Hh signaling activity is associated, depending on the context, with both cancer initiation and progression. Interestingly, the Hh pathway is remarkably druggable, raising hopes that inhibition of the pathway could support anticancer therapy. Indeed, a large body of preclinical data supports such an action, but promising clinical data are still limited to basal cell carcinoma (BSC) and medulloblastoma. Nevertheless cancer resistance against Hh targeting has already emerged as a major problem. Here we shall review the current situation with respect to targeting the Hh pathway in cancer in general and in chemotolerance in particular with a focus on the problems associated with the emergence of tumors resistant to treatment with inhibitors targeting the Hh receptor Smoothened (SMO).