The clinical significance of GLI1 expression either through canonical Hedgehog signal transduction or through non-canonical mechanisms in rhabdomyosarcoma (RMS) or Ewing sarcoma (EWS) is incompletely understood. We tested a role for Hedgehog (HH) signal transduction and GL11 expression in development of vincristine (VCR) resistance in RMS and EWS. We characterized baseline expression and activity of HH pathway components in 5 RMS (RD, Rh18, Ruch-2, Rh30, and Rh41) and 5 EWS (CHLA9, CHLA10, TC32, CHLA258, and TC71) cell lines. We then established VCR-resistant RMS and EWS cell lines by exposing cells to serially increasing concentrations of VCR and determining the IC50. We defined resistance as a ≥ 30-fold increase in IC50 compared with parental cells. We determined changes in gene expression in the VCR-resistant cells compared with parental cells using an 86-gene cancer drug resistance array that included GLI1 and tested the effect of GLI1 inhibition with GANT61 or GLI1 siRNA on VCR resistance. We found evidence for HH pathway activity and GLI1 expression in RMS and EWS cell lines at baseline, and evidence that GLI1 contributes to survival and proliferation of these sarcoma cells. We were able to establish 4 VCR-resistant cell lines (Ruch-2VR, Rh30VR, Rh41VR, and TC71VR). GLI1 was significantly up-regulated in the Rh30VR, Rh41VR, and TC71VR cells. The only other gene in the drug resistance panel that was significantly up-regulated in each of these VCR-resistant cell lines compared with their corresponding parental cells was the GLI1 direct target and multidrug resistance gene, ATP-binding cassette sub-family B member 1 (MDR1). We established major vault protein (MVP), which was up-regulated in both vincristine-resistant alveolar RMS cell lines (Rh30VR and Rh41VR), as another direct target of GLI1 during development of drug resistance. Treatment of the VCR-resistant cell lines with the small molecule inhibitor GANT61 or GLI1 siRNA together with VCR significantly decreased cell viability at doses that did not reduce viability individually. These experiments demonstrate that GLI1 up-regulation contributes to VCR resistance in RMS and EWS cell lines and suggest that targeting GLI1 may benefit patients with RMS or EWS by reducing multidrug resistance.