The Hedgehog (Hh) pathway is well known for its involvement in angiogenesis and vasculogenesis during ontogeny. The ligand, Sonic Hh (SHH), has an important role in vascular formation during development. However, SHH expression is upregulated on tumor cells and can impact the tumor microenvironment. We have investigated the effects of autocrine as well as paracrine Hh signaling on tumor cells as well as on endothelial cells, respectively. Upon constitutive expression of SHH, breast cancer cells showed aggressive behavior and rapid xenograft growth characterized by highly angiogenic tumors that were spontaneously metastatic. In these cells, SHH caused activation of the Hh transcription factor, GLI1, leading to upregulated expression of the potent pro-angiogenic secreted molecule, CYR61 (cysteine-rich angiogenic inducer 61). Silencing of CYR61 from these SHH-expressing Hh activated cells blunted the malignant behavior of the tumor cells and resulted in reduced tumor vasculature and limited hematogenous metastases. Thus, CYR61 is a critical downstream contributor to the Hh influenced pro-angiogenic tumor microenvironment. We also observed concomitant upregulation of SHH and CYR61 transcripts in tumors from patients with advanced breast cancer, further ratifying the clinical relevance of our findings. In summary, we have defined a novel, VEGF-independent, clinically relevant, pro-angiogenic factor, CYR61, that is a transcriptional target of Hh-GLI signaling.