BACKGROUND Dysregulated hedgehog signaling is the pivotal molecular abnormality underlying basal-cell carcinomas. Vismodegib is a new orally administered hedgehog-pathway inhibitor that produces objective responses in locally advanced and metastatic basal-cell carcinomas. METHODS We tested the anti–basal-cell carcinoma efficacy of vismodegib in a randomized, double-blind, placebo-controlled trial in patients with the basal-cell nevus syndrome at three clinical centers from September 2009 through January 2011. The primary end point was reduction in the incidence of new basal-cell carcinomas that were eligible for surgical resection (surgically eligible) with vismodegib versus placebo after 3 months; secondary end points included reduction in the size of existing basal-cell carcinomas. RESULTS In 41 patients followed for a mean of 8 months (range, 1 to 15) after enrollment, the per-patient rate of new surgically eligible basal-cell carcinomas was lower with vismodegib than with placebo (2 vs. 29 cases per group per year, P<0.001), as was the size (percent change from baseline in the sum of the longest diameter) of existing clinically significant basal-cell carcinomas (−65% vs. −11%, P=0.003). In some patients, all basal-cell carcinomas clinically regressed. No tumors progressed during treatment with vismodegib. Patients receiving vismodegib routinely had grade 1 or 2 adverse events of loss of taste, muscle cramps, hair loss, and weight loss. Overall, 54% of patients (14 of 26) receiving vismodegib discontinued drug treatment owing to adverse events. At 1 month, vismodegib use had reduced the hedgehog target-gene expression by basal-cell carcinoma by 90% (P<0.001) and diminished tumor-cell proliferation, but apoptosis was not affected. No residual basal-cell carcinoma was detectable in 83% of biopsy samples taken from sites of clinically regressed basal-cell carcinomas. CONCLUSIONS Vismodegib reduces the basal-cell carcinoma tumor burden and blocks growth of new basal-cell carcinomas in patients with the basal-cell nevus syndrome. The adverse events associated with treatment led to discontinuation in over half of treated patients.