The role of Hedgehog signaling in normal and malignant T-cell development is controversial. Recently, Hedgehog pathway mutations have been described in T-ALL, but whether mutational activation of Hedgehog signaling drives T-cell transformation is unknown, hindering the rationale for therapeutic intervention. Here, we show that Hedgehog pathway mutations predict chemotherapy resistance in human T-ALL, and drive oncogenic transformation in a zebrafish model of the disease. We found Hedgehog pathway mutations in 16% of 109 childhood T-ALL cases, most commonly affecting its negative regulator PTCH1. Hedgehog mutations were associated with resistance to induction chemotherapy (P = 0.009). Transduction of wild-type PTCH1 into PTCH1-mutant T-ALL cells induced apoptosis (P = 0.005), a phenotype that was reversed by downstream Hedgehog pathway activation (P = 0.007). Transduction of most mutant PTCH1, SUFU, and GLI alleles into mammalian cells induced aberrant regulation of Hedgehog signaling, indicating that these mutations are pathogenic. Using a CRISPR/Cas9 system for lineage-restricted gene disruption in transgenic zebrafish, we found that ptch1 mutations accelerated the onset of notch1-induced T-ALL (P = 0.0001), and pharmacologic Hedgehog pathway inhibition had therapeutic activity. Thus, Hedgehog-activating mutations are driver oncogenic alterations in high-risk T-ALL, providing a molecular rationale for targeted therapy in this disease.