Cancer stem cells (CSCs) represent a rare population of cells with the capacity to self-renew and give rise to heterogeneous cell lineages within a tumour. Whilst the mechanisms underlying the regulation of CSCs are poorly defined, key developmental signaling pathways required for normal stem and progenitor functions have been strongly implicated. Hedgehog (Hh) signaling is an evolutionarily-conserved pathway essential for self-renewal and cell fate determination. Aberrant Hh signaling is associated with the development and progression of various types of cancer and is implicated in multiple aspects of tumourigenesis, including the maintenance of CSCs. Here, we discuss the mounting evidence suggestive of Hh-driven CSCs in the context of haematological malignancies and solid tumours and the novel strategies that hold the potential to block many aspects of the transformation attributed to the CSC phenotype, including chemotherapeutic resistance, relapse and metastasis.