Rhabdomyosarcoma (RMS) typically arises from skeletal muscle. Currently, RMS in patients with recurrent and metastatic disease have no successful treatment. The molecular pathogenesis of RMS varies based on cancer sub-types. Some embryonal RMS but not other sub-types are driven by sonic hedgehog (Shh) signaling pathway. However, Shh pathway inhibitors particularly smoothened inhibitors are not highly effective in animals. Here, we show that Shh pathway effectors GLI1 and/or GLI2 are over-expressed in the majority of RMS cells and that GANT-61, a specific GLI1/2 inhibitor dampens the proliferation of both embryonal and alveolar RMS cells-derived xenograft tumors thereby blocking their growth. As compared to vehicle-treated control, about 50% tumor growth inhibition occurs in mice receiving GANT-61 treatment. The proliferation inhibition was associated with slowing of cell cycle progression which was mediated by the reduced expression of cyclins D1/2/3 & E and the concomitant induction of p21. GANT-61 not only reduced expression of GLI1/2 in these RMS but also significantly diminished AKT/mTOR signaling. The therapeutic action of GANT-61 was significantly augmented when combined with chemotherapeutic agents employed for RMS therapy such as temsirolimus or vincristine. Finally, reduced expression of proteins driving epithelial mesenchymal transition (EMT) characterized the residual tumors.