The widespread involvement of the Hedgehog (Hh) signaling pathway in human malignancies has motivated the clinical development of Smoothened (Smo) antagonists, such as vismodegib and sonidegib. However, Smo antagonists have failed to benefit patients suffering from Hh pathway-dependent solid tumors, such as pancreatic, colorectal, or ovarian cancer. Hh-dependent cancers are often driven by activating mutations that occur downstream of Smo and directly activate the transcription factors known as glioma-associated oncogenes (Gli1-3). Hence, the direct targeting of Gli could be a more effective strategy for achieving disease modification compared to Smo antagonism. In this study, we report on the biological and pharmacological evaluation of Oxy186, a semisynthetic oxysterol analogue, as a novel inhibitor of Hh signaling acting downstream of Smo, with encouraging drug-like properties. Oxy186 exhibits strong inhibition of ligand-induced Hh signaling in NIH3T3-E1 fibroblasts, as well as in constitutively activated Hh signaling in Suppressor of Fused (Sufu) null mouse embryonic fibroblast (MEF) cells. Oxy186 also inhibits Gli1 transcriptional activity in NIH3T3-E1 cells expressing exogenous Gli1 and Gli-dependent reporter constructs. Furthermore, Oxy186 suppresses Hh signaling in PANC-1 cells, a human pancreatic ductal adenocarcinoma (PDAC) tumor cell line, as well as PANC-1 cell proliferation in vitro, and in human lung cancer cell lines, A549 and H2039.