Copyright © 2016 by The American Society for Pharmacology and Experimental Therapeutics. The metalloid arsenic is a worldwide environmental toxicant, exposure to which is associated with many adverse outcomes. Arsenic is also an effective therapeutic agent in certain disease settings. Arsenic was recently shown to regulate the activity of the Hedgehog (HH) signal transduction pathway, and this regulation of HH signaling was proposed to be responsible for a subset of arsenic's biologic effects. Surprisingly, these separate reports proposed contradictory activities for arsenic, as either an agonist or antagonist of HH signaling. Here we provide in vitro and in vivo evidence that arsenic acts as a modulator of the activity of the HH effector protein glioma-Associated oncogene family zinc finger (GLI), activating or inhibiting GLI activity in a context-dependent manner. This arsenic-induced modulation of HH signaling is observed in cultured cells, patients with colorectal cancer who have received arsenic-based therapy, and a mouse colorectal cancer xenograft model. Our results show that arsenic activates GLI signaling when the intrinsic GLI activity is low but inhibits signaling in the presence of high-level GLI activity. Furthermore, we show that this modulation occurs downstream of primary cilia, evidenced by experiments in suppressor of fused homolog (SUFU) deficient cells. Combining our findings with previous reports, we present an inclusive model in which arsenic plays dual roles in GLI signaling modulation: when GLIs are primarily in their repressor form, arsenic antagonizes their repression capacity, leading to low-level GLI activation, but when GLIs are primarily in their activator form, arsenic attenuates their activity.