Chronic stress and prolonged glucocorticoid exposure may lead to impaired neuroplasticity and cellular dysfunction, which are key contributors to depression-like conditions. Sonic hedgehog (Shh) signaling plays a crucial role in neurogenesis, and its dysregulation has been implicated in reduced neurite outgrowth, proliferation, and cytoskeletal stability. Dexamethasone, a synthetic glucocorticoid, is widely used to model stress-induced neuronal dysfunction. However, the precise mechanisms through which dexamethasone impairs neuroplasticity and neuronal survival remain unclear as well as the therapeutic strategies to counteract such effects remain underexplored. This study explores whether activation of Shh signaling can mitigate stress-associated molecular changes resulting from dexamethasone-induced suppression of neuroplasticity. For induction of stress-induced neuroplasticity deficits model, N2a cells were treated with dexamethasone (1 μM) for 24 h. In treatment strategy, cells were co-treated with purmorphamine (1 μM) alongside dexamethasone for 24 h to activate Shh signaling. Dexamethasone suppressed glucocorticoid receptor phosphorylation, Shh signaling, and the expression of neurogenic and cytoskeletal markers. These changes were accompanied by reduced neuritic complexity and cell proliferation. Purmorphamine co-treatment significantly restored glucocorticoid receptor activity, Shh pathway components, and the expression of BDNF, profilin1, and SOX2. Morphological analyses revealed partial rescue of neurite architecture and enhanced proliferation. Our findings highlighted that purmorphamine mitigates dexamethasone-induced neuronal dysfunction by reactivating GR and Shh signaling and restoring transcriptional programs governing neuroplasticity. These findings highlight its potential as a neuroprotective agent against stress-related neural impairment.