The molecular determinants of Sonic Hedgehog (Shh) signaling in mammalian cells and, in particular, those of the CNS are unclear. Here we report that primary cortical astrocyte cultures are highly responsive to both Shh protein and Hh Agonist 1.6, a selective, small molecule Smoothened agonist. Both agonists produced increases in mRNA expression of Shh-regulated gene targets, Gli-1 and Patched in a cyclopamine- and forskolin-sensitive manner. Using this model we show for the first time that Shh pathway activation mediates rapid increases in p38 MAPK phosphorylation, without altering phosphorylation of either extracellular-signal-regulated kinases or c-jun N-terminal kinases. Selective inhibition of p38 MAPK significantly attenuated Shh-dependent up-regulation of Gli-1, inter-alpha trypsin inhibitor and thrombomodulin mRNA, however did not affect expression of insulin-like growth factor 2 or a novel Shh target, membrane-associated guanylate kinase p55 subfamily member 6. Using RNAi and a constitutively-active mutant we show that Shh signaling to p38 MAPK and subsequent Gli-1 transcription requires G-protein receptor kinase 2. Taken together, these findings provide evidence for a central role of G-protein receptor kinase 2-dependent p38 MAPK activity in regulating Shh-mediated gene transcription in astrocytes.