Hedgehog (Hh) signaling in vertebrates depends on primary cilia. Upon stimulation, Hh pathway components, including Gli transcription factors, accumulate at primary cilia to transduce the Hh signal, but the mechanisms underlying their ciliary targeting remains largely unknown. Here, we show that the PY-type nuclear localization signal (PY-NLS)/karyopherinβ2 (Kapβ2) nuclear import system regulates Gli ciliary localization and Hh pathway activation. Mutating the PY-NLS in Gli or knockdown of Kapβ2 diminished Gli ciliary localization. Kapβ2 is required for the formation of Gli activator (GliA) in wild-type but not in Sufu mutant cells. Knockdown of Kapβ2 affected Hh signaling in zebrafish embryos, as well as in vitro cultured cerebellum granule neuron progenitors (CGNPs) and SmoM2-driven medulloblastoma cells. Furthermore, Kapβ2 depletion impaired the growth of cultured medulloblastoma cells, which was rescued by Gli overexpression. Interestingly, Kapβ2 is a transcriptional target of the Hh pathway, thus forming a positive feedback loop for Gli activation. Our study unravels the molecular mechanism and cellular machinery regulating Gli ciliary localization and identifies Kapβ2 as a critical regulator of the Hh pathway and a potential drug target for Hh-driven cancers.