BACKGROUND: Early events in the progression of 90% of sporadic colorectal cancers depend on constitutive activation of Wnt signaling. Recent data also indicate a close association between the Hedgehog (Hh) and Wnt pathways in colonic epithelial cell differentiation. AIMS: To investigate whether the expression of Gli1, a transactivator of Hh signaling, can suppress Wnt signaling and inhibit proliferation of human colorectal cancer cells. METHODS: Gli1 and nuclear beta-catenin expression were examined in a series of 40 human colorectal cancers by immunohistochemistry. We quantified Gli1 and nuclear beta-catenin staining as markers of Hh and Wnt pathway activation, respectively. Two human colon cancer cell lines, SW480 and HCT116, with mutations in APC and beta-catenin, respectively, were used. The effects of Gli1 overexpression on Wnt transcriptional activity, beta-catenin subcellular distribution, and proliferation in these cells were analysed. RESULTS: Nuclear accumulation of beta-catenin and the Gli1 staining level were inversely associated in the 40 human colorectal cancers. Wnt transcriptional activity was reduced in Gli1-transfected cells. These effects were observed even in Gli1-transfected cells cotransfected with mutated beta-catenin. Furthermore, nuclear accumulation of beta-catenin was diminished compared to that in empty vector-transfected cells, and downregulated transcription of c-Myc was observed in Gli1- transfected cells. Proliferation of Gli1-transfected cells was also significantly suppressed compared to that in empty vector-transfected cells. CONCLUSIONS: Our data suggest that Gli1 plays an inhibitory role in the development of colorectal cancer involving Wnt signaling, even in cases with the stabilising mutation of beta-catenin.