Since the discovery of the segment polarity gene Hedgehog in Drosophila three decades ago, our knowledge of Hedgehog signaling pathway has considerably improved and paved the way to a wide field of investigations in the developing and adult central nervous system. Its peculiar transduction mechanism together with its implication in tissue patterning, neural stem cell biology, and neural tissue homeostasis make Hedgehog pathway of interest in a high number of normal or pathological contexts. Consistent with its role during brain development, misregulation of Hedgehog signaling is associated with congenital diseases and tumorigenic processes while its recruitment in damaged neural tissue may be part of the repairing process. This review focuses on the most recent data regarding the Hedgehog pathway in the developing and adult central nervous system and also its relevance as a therapeutic target in brain and spinal cord diseases.