Smoothened (Smo) mediated Hedgehog (Hh) signaling plays an essential role in regulating embryonic development and postnatal tissue homeostasis. Aberrant activation of the Hh pathway contributes to the formation and progression of various cancers. In vertebrates, however, key regulatory mechanisms responsible for transducing signals from Smo to the nucleus remain to be delineated. Here, we report the identification of Myc-interacting Zinc finger protein 1 (Miz1) as a Smo and Gli2 binding protein that positively regulates Hh signaling. Overexpression of Miz1 increases Gli luciferase reporter activity, whereas knockdown of endogenous Miz1 has the opposite effect. Activation of Smo induces translocation of Miz1 to the primary cilia together with Smo and Gli2. Furthermore, Miz1 is localized to the nucleus upon Hh activation in a Smo-dependent manner, and loss of Miz1 prevents the nuclear translocation of Gli2. More importantly, silencing Miz1 expression inhibits cell proliferation in vitro and the growth of Hh-driven medulloblastoma tumors allografted in SCID mice. Taken together, these results identify Miz1 as a novel regulator in the Hh pathway that plays an important role in mediating Smo-dependent oncogenic signaling.