The failure of breast cancer treatment is largely due to the development of estrogen independence. Current data illustrate that Hedgehog (Hh) signaling may play an important role in breast cancer development. Here, we show that the expression of the Hh effector protein, Gli1 was significantly higher in estrogen-independent breast cancer cells than in estrogen-dependent cells. Our data showed for the first time that stable expression of Gli1 in ER positive breast cancer cell lines MCF-7 and T47D can induce estrogen-independent proliferation and promote G1/S phase transition, which associated with cyclin-Rb axi. Gli1 can also attenuate the response of proliferation to estrogenic stimulation, which was correlated with down-regulation of expression of ERalpha and PR, as well as down-regulation of transactivation of ERalpha. Our results suggest that up-regulation of Gli1 in breast cancer cells may be one of the mechanisms responsible for developing estrogen independence and this process may be regulated through down-regulation of expression and transactivation of ERalpha.