We report novel inhibitors of Gli1-mediated transcription as potential anticancer agents. Focused chemical libraries were designed and assessed for inhibition of functional cell-based Gli1-mediated transcription and selective toxicity toward cancer cells. The SAR was revealed, and the selectivity of the lead compounds' inhibition of Gli1-mediated transcription over that of Gli2 was determined. Compound 63 (NMDA298-1), which inhibited Gli1-mediated transcription in C3H10T1/2 cells with an IC(50) of 6.9 muM, showed 3-fold selectivity for inhibiting transcription mediated by Gli1 over that by Gli2. Cell-viability assays were performed to evaluate the chemical library in a normal cell line and a panel of cancer cell lines with or without up-regulated expression of the Gli1 gene. These compounds decreased the viability of several cancer cell lines but were less active in the noncancerous BJ-hTERT cells.