Background & Aims Sonic Hedgehog (Shh) is expressed in the adult stomach, but its role as a gastric morphogen is unclear. We sought to identify mechanisms by which Shh might regulate gastric epithelial cell function and differentiation. Methods Mice with a parietal cell–specific deletion of Shh ( HKCre/Shh KO ) were created. Gastric morphology and function were studied in control and HKCre/Shh KO mice between 1 and 8 months of age. Results In contrast to control mice, HKCre/Shh KO mice developed gastric hypochlorhydria, hypergastrinemia, and a phenotype that resembled foveolar hyperplasia. The fundic mucosa of HKCre/Shh KO mice had an expanded surface pit cell lineage that was documented by increased incorporation of bromodeoxyuridine and was attributed to the hypergastrinemia. Compared with controls, numbers of total mucous neck and zymogen cells were significantly decreased in stomachs of HKCre/Shh KO mice. In addition, zymogen and neck cell markers were coexpressed in the same cell populations, indicating disrupted differentiation of the zymogen cell lineage from the mucous neck cells in the stomachs of HKCre/Shh KO mice. Laser capture microdissection of the surface epithelium, followed by quantitative reverse-transcription polymerase chain reaction, revealed a significant increase in expression of Indian Hedgehog, glioma-associated oncogene homolog 1, Wnt, and cyclin D1. Laser capture microdissection analysis also showed a significant increase in Snail with a concomitant decrease in E-cadherin. Conclusions In the stomachs of adult mice, loss of Shh from parietal cells results in hypochlorhydria and hypergastrinemia. Hypergastrinemia might subsequently induce increased Hedgehog and Wnt signaling in the surface pit epithelium, resulting in hyperproliferation.