The mismatch repair (MMR) system is indispensable for the fidelity of DNA replication, the impairment of which predisposes to the development and progression of many types of cancers. To date, GLI1 transcription factor, a key molecule of the Hedgehog signaling pathway, has been shown to regulate the expression of several genes crucial for a variety of cancer cell properties in many types of cancers, including pancreatic ductal adenocarcinoma (PDAC), but whether GLI1 could control the MMR system was not known. Here, we showed that GLI1 and GLI2 indirectly suppressed the expression of MLH1 in PDAC cells. Through GLI1 target gene screening, we found that GLI1 and GLI2 activated the expression of a basic helix-loop-helix type suppressor BHLHE41/DEC2/SHARP1 through a GLI-binding site in the promoter. Consistent with a previous report that BHLHE41 suppresses the MLH1 promoter activity, we found that the activation of GLI1 led to the BHLHE41-dependent suppression of MLH1, and a double knockdown of GLI1 and GLI2 conversely increased the MLH1 protein in PDAC cells. Using TALEN-based modification of the MLH1 gene, we further showed that GLI1 expression was indeed associated with an increased tolerance to a methylating agent, methylnitrosourea cooperatively with a lower copy number status of MLH1. Finally, GLI1 expression was immunohistochemically related positively with BHLHE41 and inversely with MLH1 in PDAC cells and precancerous lesions of the pancreas. On the basis of these results, we propose that GLI1 depresses the MMR activity and might contribute to the development and progression of PDAC.