© 2014 by The American Society for Biochemistry and Molecular Biology, Inc. Aberrant expression of hedgehog molecules, particularly Gli1, is common in cancers of many tissues and is responsible for their aggressive behavior and chemoresistance. Here we demonstrate a novel and tumor-specific role for aberrant Gli1 in the regulation of the S-phase checkpoint that suppresses replication stress and resistance to chemotherapy. Inhibition of Gli1 in tumor cells induced replication stress-mediated DNA damage response, attenuated their clonogenic potential, abrogated camptothecin (CPT)-induced Chk1 phosphorylation, and potentiated its cytotoxicity. However, in normal fibroblasts, Gli1 siRNAs showed no significant changes in CPT-induced Chk1 phosphorylation. Further analysis of ataxia telangiectasia and Rad3-related protein (ATR)/Chk1 signaling cascade genes in tumor cells revealed an unexpected mechanism whereby Gli1 regulates ATR-mediated Chk1 phosphorylation by transcriptional regulation of the BH3-only protein Bid. Consistent with its role in DNA damage response, Bid down-regulation in tumor cells abolished CPT-induced Chk1 phosphorylation and sensitized them to CPT. Correspondingly, Gli1 inhibition affected the expression of Bid and the association of replication protein A (RPA) with the ATR- interacting protein (ATRIP)-ATR complex, and this compromised the S-phase checkpoint. Conversely, complementation of Bid in Gli1-deficient cells restored CPT-induced Chk1 phosphorylation. An in silico analysis of the Bid promoter identified a putative Gli1 binding site, and further studies using luciferase reporter assays confirmed Gli1-dependent promoter activity. Collectively, our studies established a novel connection between aberrant Gli1 and Bid in the survival of tumor cells and their response to chemotherapy, at least in part, by regulating the S-phase checkpoint. Importantly, our data suggest a novel drug combination of Gli1 and Top1 inhibitors as an effective therapeutic strategy in treating tumors that expresses Gli1.