This study aimed to investigate the effects of cyclopamine, a specific inhibitor of Hedgehog signaling pathways, on the chondrogenic differentiation of mesenchymal stem cells (MSCs). During culture, the experimental groups were treated with cyclopamine and their cell proliferation status was assessed using the MTT test. The extra-bone cellular matrix (ECM) and Collagen II (Col II) was detected by toluidine blue staining and immunohistochemistry of cells. The concentrations of Col II and aggrecan in the culture solution and cytosol were detected using ELISA on the 7th, 14th, and 21st days of cyclopamine induction. Gene and protein expression of Col II and aggrecan were analyzed on the 14th day of cyclopamine induction using real-time PCR and western blot analyses. No significant differences in proliferation of mesenchymal stem cells were found between the control group and the group treated with cyclopamine. Compared to the blank control group, the ECM level was low and the protein and mRNA concentrations of Collagen II (Col II) and aggrecan in the culture solution and cytosol, respectively, were significantly reduced in the experimental group. The Smo acted as a key point in the regulations of Hedgehog signaling pathway on the chondrogenic differentiation of rabbit MSCs.