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Background: Lung cancer, especially non-small cell lung cancer (NSCLC) is the major cause of cancer-related deaths in the United States. The aggressiveness of NSCLC has been shown to be associated with the acquisition of epithelial-to-mesenchymal transition (EMT). The acquisition of EMT phenotype induced by TGF-β1 in several cancer cells has been implicated in tumor aggressiveness and resistance to conventional therapeutics; however, the molecular mechanism of EMT and tumor aggressiveness in NSCLC remains unknown. Methodology/Principal Findings: In this study we found for the first time that the induction of EMT by chronic exposure of A549 NSCLC cells to TGF-β1 (A549-M cells) led to the up-regulation of sonic hedgehog (Shh) both at the mRNA and protein levels causing activation of hedgehog signaling. These results were also reproduced in another NSCLC cell line (H2030). Induction of EMT was found to be consistent with aggressive characteristics such as increased clonogenic growth, cell motility and invasion. The aggressiveness of these cells was attenuated by the treatment of A549-M cells with pharmacological inhibitors of Hh signaling in addition to Shh knock-down by siRNA. The inhibition of Hh signaling by pharmacological inhibitors led to the reversal of EMT phenotype as confirmed by the reduction of mesenchymal markers such as ZEB1 and Fibronectin, and induction of epithelial marker E-cadherin. In addition, knock-down of Shh by siRNA significantly attenuated EMT induction by TGF-β1. Conclusions/Significance: Our results show for the first time the transcriptional up-regulation of Shh by TGF-β1, which is mechanistically associated with TGF-β1 induced EMT phenotype and aggressive behavior of NSCLC cells. Thus the inhibitors of Shh signaling could be useful for the reversal of EMT phenotype, which would inhibit the metastatic potential of NSCLC cells and also make these tumors more sensitive to conventional therapeutics. [ABSTRACT FROM AUTHOR]