Vismodegib (GDC-0449), an orally bioavailable small-molecule inhibitor of Hedgehog signaling, was recently approved by the U.S. Food and Drug Administration for the treatment of basal cell carcinoma that is either metastatic or locally advanced in patients who are not candidates for surgical resection or radiation. Given the absence of previously defined effective drug therapy for this disease, approval was granted primarily on the basis of outcome of a nonrandomized parallel cohort phase II study of 99 patients with advanced basal cell carcinoma, with a primary endpoint of objective response rate. Response rates of 30.3% and 42.9% were observed in metastatic and locally advanced cohorts in this study, respectively, associated with median progression-free survival in both cohorts of 9.5 months. Ongoing clinical investigations include evaluation of the potential efficacy of vismodegib in a variety of diseases and in combination with other agents. The mechanism of action, preclinical and clinical data, and potential utility in other disease contexts are reviewed here.