Aberrant activation of the Hedgehog (Hh) signaling pathway has been reported in various cancer types including hepatocellular carcinoma (HCC). As a key effector of this signaling, Gli2 plays a crucial role in carcinogenesis, including the activation of genes encoding apoptosis inhibitors and cell‐cycle regulators. In this study, we examined the role of Gli2 proliferation and survival of HCC cells. First, the expression levels of Hh pathway components were detected in a subset of HCC cell lines. To establish the role of Gli2 in maintaining the tumorigenic properties of HCC cells, we developed small hairpin RNA (shRNA) targeting Gli2 and transfected it into SMMC‐7721 cell, which was selected with high level of Hh signaling expression. Next, effects of Gli2 gene silencing, on cell proliferation and on the expression of cell cycle‐related proteins were evaluated, then, whether down‐regulation of Gli2 renders HCC cell susceptible to TRAIL was examined in vitro. Knockdown of Gli2 inhibited cell proliferation and induced G1 phase arrest of cell cycle in SMMC‐7721 cell through down‐regulation of cyclin D1, cyclinE2, and up‐regulation of p21‐WAF1. Also, Gli2 gene siliencing sensitized SMMC‐7721 cell to tumor necrosis factor‐related apoptosis‐inducing ligand‐induced apoptosis by reducing the expression of the long and short isoform of c‐FLIP and Bcl‐2, and then augmented the activation of initiator caspases‐8/‐9 and effector caspases‐3, which induces PARP cleavage. In conclusion, our data suggest that Gli2 plays a predominant role in the proliferation and apoptosis resistance of HCC cells, and that knockdown of Gli2 may be a novel anticancer strategy for the treatment of HCC. J. Cell. Biochem. 112: 3140–3150, 2011. © 2011 Wiley Periodicals, Inc.