The purpose of this work is to study the activation of the hedgehog signalling pathway is associated with tumour progression in various types of cancer, hence the development of specific antagonists raises hope for new therapeutic strategies. Therefore, the expression of hedgehog pathway components in anaplastic thyroid cancer (ATC) and effects of the hedgehog inhibitor Cyclopamine on ATC cells were investigated in this study. Expression of the ligand Sonic Hedgehog (SHh), the transmembrane protein Smoothened (Smo), the receptor Patched (Ptc) and the target gene Gli-1 was evaluated in two ATC cell lines (Hth 74, C643) by RT-PCR and in tumour specimens by immunohistochemistry. The corresponding gene products were examined by western blotting analysis. After treatment with different concentrations of Cyclopamine the time-dependent course of cell viability in ATC cell lines was evaluated by MTT assay. SHh, Smo, Ptc and Gli were clearly expressed on mRNA and protein levels in both cell lines and in tumour samples (41 %SHh, 65 %Smo, 65 %Ptc and 65 %Gli). Treatment with Cyclopamine showed a time- and dose-dependent inhibition of cell numbers with IC50 values between 1 and 4 μM in both cell lines, comparable to other types of cancer. In conclusion, we believe that the hedgehog pathway is expressed in anaplastic thyroid carcinoma specimens and proliferation of ATC cell lines can be influenced by the Hh inhibitor Cyclopamine. Aberrant activation of this pathway might be involved in the aggressive biology of anaplastic cancer and further evaluation regarding a possible clinical impact of pathway inhibition is warranted.