Hedgehog is a key morphogen regulating development and leading to tumorigenesis, when hyperactivated. Hedgehog signaling is mediated by transcriptional effectors belonging to the Gli family. Ubiquitination-related posttranslational modifications of the Gli transcription factors, leading to proteasome-dependent proteolytic cleavage or massive degradation, represent an important mechanism of regulation of the pathway. Gli ubiquitination is controlled by a number of E3 ligases belonging to the RING/Cullin and HECT families. These E3 ligases are regulated by several members of the Hh pathway itself (e.g., Smo-activated kinases) as well as by proteins belonging to other signaling cascades (i.e., Numb-activated Itch). These proteolytic signals finally suppress Gli function either directly or indirectly (i.e., suppression of HDAC1-mediated Gli deacetylation). The complex of these regulatory circuitries finely tunes Hedgehog signaling providing a tight control of developmental processes, the subversion of which leads to tumorigenesis. To this regard, these ubiquitination processes represent promising targets for novel therapeutic strategies.