Sonic hedgehog (Shh) acts as a morphogen in normal development of various vertebrate tissues and organs. Shh signaling is essential for patterning and cell-fate specification, particularly in the central nervous system. Shh signaling plays different roles depending on its concentration, area, and timing of exposure. During the development of the neocortex, a low level of Shh is expressed in the neural stem/progenitor cells as well as in mature neurons in the dorsal telencephalon. Shh signaling in neocortex development has been shown to regulate cell cycle kinetics of radial glial cells and intermediate progenitor cells, thereby maintaining the proliferation, survival and differentiation of neurons in the neocortex. During the development of the telencephalon, endogenous Shh signaling is involved in the transition of slow-cycling neural stem cells to fast-cycling neural progenitor cells. It seems that high-level Shh signaling in the ventral telencephalon is essential for ventral specification, while low-level Shh signaling in the dorsal telencephalon plays important roles in the fine-tuning of cell cycle kinetics. The Shh levels and multiple functions of Shh signaling are important for proper corticogenesis in the developing brain. The present paper discusses the roles of Shh signaling in the proliferation and differentiation of neural stem/progenitor cells.