Inappropriate Hedgehog (Hh) signaling has been directly linked to medulloblastoma (MB), a common malignant brain tumor in children. GDC-0449 is an Hh pathway inhibitor (HPI) currently under clinical investigation as an anticancer agent. Treatment of a MB patient with GDC-0449 initially regressed tumors, but this individual ultimately relapsed with a D473H resistance mutation in Smoothened (SMO), the molecular target of GDC-0449. To explore the role of the mutated aspartic acid residue in SMO function, we substituted D473 with every amino acid and found that all functional mutants were resistant to GDC-0449, with positively charged residues conferring potential oncogenic properties. Alanine scan mutagenesis of SMO further identified E518 as a novel prospective mutation site for GDC-0449 resistance. To overcome this form of acquired resistance, we screened a panel of chemically diverse HPIs and identified several antagonists with potent in vitro activity against these GDC-0449–resistant SMO mutants. The bis-amide compound 5 was of particular interest, as it was able to inhibit tumor growth mediated by drug resistant SMO in a murine allograft model of MB. However, focal amplifications of the Hh pathway transcription factor Gli2 and the Hh target gene cyclin D1 (Ccnd1) were observed in two additional resistant models, indicating that resistance may also occur downstream of SMO. Importantly, these HPI resistant MB allografts retained their sensitivity to PI3K inhibition, presenting additional opportunities for the treatment of such tumors. Cancer Res; 71(2); 435–44. ©2010 AACR.