Defects in a developmental signaling pathway involving the mammalian homologue of the Drosophila segment polarity gene, patched are associated with human tumors such as basal cell carcinoma, medulloblastoma and squamous cell carcinoma. Loss of heterozygosity (LOH) in some of these tumor cells suggests that patched functions as a tumor suppressor gene. To evaluate the biological significance of patched mutations in human sporadic tumor cells, we constructed a VSV-G pseudotyped retrovirus vector carrying the wild-type patched gene and transduced it into two human squamous cell carcinoma (SCC) cell lines, A431 and KA, that express only mutant patched mRNA. When SSC cells were transduced with Ptc virus, colony forming activity in soft agar was drastically reduced and these cells recovered anchorage independent growth when Sonic hedgehog (Shh), the ligand of Patched (Ptc), was added into the soft agar culture. Expression of exogenous patched, however, had no effect on anchorage independent growth of Ras-transformed NIH3T3 cells or SCC cell line, NA, which expresses wild-type patched mRNA. Cyclopamine, a specific inhibitor of the Shh/Ptc/Smo signaling pathway, efficiently suppressed anchorage independent growth of A431 and KA cells. These results indicate that loss of patched function plays a major role in the acquisition of oncogenic potential in these SCCs and further that Ptc virus would be an effective reagent for suppressing tumorigenicity of such SCCs.