Breast cancer frequently metastasizes to bone, in which tumor cells receive signals from the bone marrow microenvironment. One relevant factor is TGF-β, which upregulates expression of the Hedgehog (Hh) signaling molecule, Gli2, which in turn increases secretion of important osteolytic factors such as parathyroid hormone-related protein (PTHrP). PTHrP inhibition can prevent tumor-induced bone destruction, whereas Gli2 over-expression in tumor cells can promote osteolysis. In this study, we tested the hypothesis that Hh inhibition in bone metastatic breast cancer would decrease PTHrP expression and therefore osteolytic bone destruction. However, when mice engrafted with human MDA-MB-231 breast cancer cells were treated with the Hh receptor antagonist cyclopamine, we observed no effect on tumor burden or bone destruction. In vitro analyses revealed that osteolytic tumor cells lack expression of the Hh receptor, Smoothened, suggesting an Hh-independent mechanism of Gli2 regulation. Blocking Gli signaling in metastatic breast cancer cells with a Gli2-repressor gene (Gli2-rep) reduced endogenous and TGF-β-stimulated PTHrP mRNA expression, but did not alter tumor cell proliferation. Furthermore, mice inoculated with Gli2-Rep-expressing cells exhibited a decrease in osteolysis, suggesting that Gli2 inhibition may block TGF-β propagation of a vicious osteolytic cycle in this MDA-MB-231 model of bone metastasis. Accordingly, in the absence of TGF-β signaling, Gli2 expression was downregulated in cells, whereas enforced overexpression of Gli2 restored PTHrP activity. Taken together, our findings suggest that Gli2 is required for TGF-β to stimulate PTHrP expression and that blocking Hh-independent Gli2 activity will inhibit tumor-induced bone destruction.