Cell and molecular mechanisms mediating the cardiovascular effects of alcohol are not fully understood. Our aim was to determine the effect of moderate ethanol (EtOH) on sonic hedgehog (SHh) signaling in regulating possible stem cell antigen-1 positive (Sca1+ ) progenitor stem cell involvement during pathologic arterial remodeling. Partial ligation or sham operation of the left carotid artery was performed in transgenic Sca1-enhanced green fluorescent protein (eGFP) mice gavaged with or without "daily moderate" EtOH. The EtOH group had reduced adventitial thickening and less neointimal formation, compared to ligated controls. There was expansion of eGFP-expressing (i.e., Sca1+ ) cells in remodeled vessels postligation (day 14), especially in the neo intima. EtOH treatment reduced the number of Sca1+ cells in ligated vessel cross-sections concomitant with diminished remodeling, compared to control ligated vessels. Moreover, EtOH attenuated SHh signaling in injured carotids as determined by immunohistochemical analysis of the target genes patched 1 and Gli2, and RT-PCR of whole-vessel Gli2 mRNA levels. Intraperitoneal injection of ligated Sca1-eGFP mice with the SHh signaling inhibitor cyclopamine diminished SHh target gene expression, reduced the number of Sca1+ cells, and ameliorated carotid remodeling. EtOH treatment of purified Sca1+ adventitial progenitor stem cells invitro inhibited SHh signaling, and their rSHh-induced differentiation to vascular smooth muscle cells. EtOH reduces SHh-responsive Sca1+ progenitor cell myogenic differentiation/expansion invitro and during arterial remodeling in response to ligation injury invivo. Regulation of vascular Sca1+ progenitor cells in this way may be an important novel mechanism contributing to alcohol's cardiovascular protective effects.