Molecular and cellular signaling pathways are involved in the process of neural differentiation from human embryonic stem cells (hESC) to terminally differentiated neurons. The Sonic hedgehog (SHH) morphogen is required to direct the differentiation of hESC to several neural subtypes, for example, dopaminergic (DA) or motor neurons. However, the roles of SHH signaling and the pathway target genes that regulate the diversity of cellular responses arising from SHH activation during neurogenesis of hESC have yet to be elucidated. In this study, we report that overexpression of SHH in hESC promotes the derivation of neuroprogenitors (NP), increases proliferation of NP, and subsequently increases the yield of DA neurons. Next, gene expression changes resulting from the overexpression of SHH in hESC-derived NP were examined by genome-wide transcriptional profiling. Categorizing the differentially expressed genes according to the Gene Ontology biological processes showed that they are involved in numerous cellular processes, including neural development, NP proliferation, and neural specification. In silico GLI-binding sites analysis of the differentially expressed genes also identified a set of putative novel direct target genes of SHH in hESC-derived NP, which are involved in nervous system development. Electrophoretic mobility shift assays and promoter-luciferase assays confirmed that GLI1 binds to the promoter region and activates transcription of HEY2, a NOTCH signaling target gene. Taken together, our data provide evidence for the first time that there is cross-talk between the NOTCH and SHH signaling pathways in hESC-derived NP and also provide significant new insights into transcriptional targets in SHH-mediated neural differentiation of hESC.