The roles of Indian hedgehog (Ihh) signaling pathway in the proliferation and apoptosis of precartilaginous stem cells (PSCs) were investigated. PSCs, labeled with fibroblast growth factor receptor 3 (FGFR-3), were isolated from neonatal rats by immunomagnetic separation. After identification with FGFR-3 and Col II, the cells were incubated with different concentrations of cyclopamine (cyclo), the specific inhibitor of Ihh signaling pathway. The morphologic changes of the cells were observed under the inverted phase contrast microscope. The mRNA expression levels of Ihh, parathyroid hormonerelated peptide (PTHrP), protein Patched (Ptch), Bcl-2 and p21 were detected by RT-PCR. The protein expression levels of Ihh and Ptch were measured by Western blot. MTT assay was used to examine the effects of cyclo on proliferation of PSCs. Apoptosis rate of PSCs was examined by Annexin V/PI assay of flow cytometric analyses. After PSCs were incubated with cyclo, obvious morphologic changes were observed as compared with the control group. The mRNA expression levels of PTHrP, Ptch and Bcl-2 were decreased to varying degrees in a cyclo dose-dependent manner. However, the expression levels of Ihh and p21 mRNA were increased. The protein expression of Ptch and Ihh had the same change as the mRNA expression. Meanwhile, cyclo could obviously inhibit the proliferation and promote the apoptosis of PSCs. The results indicated that Ihh signaling pathway plays an important role in regulating the proliferation and apoptosis of PSCs, which is probably mediated by Bcl-2 and p21.