Pancreatic cancer (PC) is an aggressive and metastatic gastrointestinal tumor with a poor prognosis. Persistent activation of the TGF-β/Smad signaling induces PC cell (PCC) invasion and infiltration via epithelial-to-mesenchymal transition (EMT). Hedgehog signaling is a crucial pathway for the development of PC via the transcription factors Gli1/2/3. This study aimed to investigate the underlying molecular mechanisms of action of hedgehog activation in TGF-β1-triggered EMT in PCCs (PANC-1 and BxPc-3). In addition, overexpression and shRNA techniques were used to evaluate the role of Smad4 in TGF-β1-treated PCCs. Our data showed that TGF-β1 promoted PCC invasion and infiltration via Smad2/3-dependent EMT. Hedgehog-Gli signaling axis in PCCs was activated upon TGF-β1 stimulation. Inhibition of hedgehog with cyclopamine effectively antagonized TGF-β1-induced EMT, thereby suggesting that the hedgehog signaling may act as a downstream cascade signaling of TGF-β1. As a key protein that assists the nuclear translocation of Smad2/3, Smad4 was highly expressed in PANC-1 cells, but not in BxPc-3 cells. Conversely, Gli1 expression was low in PANC-1 cells, but high in BxPc-3 cells. Furthermore, knockdown of Smad4 in PANC-1 cells by shRNA inhibited TGF-β1-mediated EMT and collagen deposition. Overexpression of Smad4 did not affect TGF-β1-mediated EMT due to the lack of significant increase in nuclear expression of Smad4. Importantly, Gli1 activity was upregulated by Smad4 knockdown in PANC-1 cells and downregulated by Smad4 overexpression in BxPc-3 cells, indicating that Gli1 may be a negative target protein downstream of Smad4. Thus, Smad4 regulates TGF-β1-mediated hedgehog activation to promote EMT in PCCs by suppressing Gli1 activity.