Background. Although acute graft rejection can be successfully controlled by immunosuppressive agents, chronic rejection (CR), which is characterized by arteriosclerosis in the donor organ vessels, is a major hurdle to long-term allograft survival. Sonic hedgehog (Shh), a morphogen critical in embryogenesis, also promotes peripheral immunity, which prompted us to investigate if inhibition of Shh signaling could reduce CR and thereby enhance allograft survival. Methods. In a rat orthotopic small bowel transplantation model, FK506 prevented acute rejection; however, recipients eventually lost their grafts by CR. Anti-Shh antibody or isotype control were administered to animals at day 30 postoperatively. Graft survival, tissue fibrosis, vascular occlusion, and expression of vascular endothelial growth factor (VEGF) were investigated. Results. Immunostaining revealed that Shh and the Hedgehog receptor Patched 1 (Ptc1) are strongly expressed in CR grafts and that Ptc1 expression partially overlapped with that of ED-1, a macrophage marker. In contrast, only minimal expression of Shh and Ptc1 was detected in syngeneic grafts. Grafts survival was significantly prolonged after anti-Shh antibody treatment compared with the immunoglobulin G control (116 vs. 77.5 days). Collagen deposition and vascular occlusion in the mesentery were markedly reduced in recipients of the anti-Shh antibody. Specific transcripts and protein expression for VEGF, which was present mainly in the blood vessels, were reduced. Conclusion. In a rat small bowel transplantation model, anti-Shh antibody treatment reduced CR and prolonged graft survival. These beneficial effects of Shh treatment may occur partly by reducing VEGF expression in the blood vessels of the allografts.