ABSTRACT Different tissues contain diverse and dynamic cellular niches, providing distinct signals to tissue-resident or migratory infiltrating immune cells. Hedgehog (Hh) proteins are secreted inter-cellular signalling molecules, which are essential during development and are important in cancer, post-natal tissue homeostasis and repair. Hh signalling mediated by the Hh-responsive transcription factor Gli2 also has multiple roles in T-lymphocyte development and differentiation. Here, we investigate the function of Gli2 in T-cell signalling and activation. Gene transcription driven by the Gli2 transcriptional activator isoform (Gli2A) attenuated T-cell activation and proliferation following T-cell receptor (TCR) stimulation. Expression of Gli2A in T-cells altered gene expression profiles, impaired the TCR-induced Ca2+ flux and nuclear expression of NFAT2, suppressed upregulation of molecules essential for activation, and attenuated signalling pathways upstream of the AP-1 and NFκB complexes, leading to reduced activation of these important transcription factors. Inhibition of physiological Hh-dependent transcription increased NFκB activity upon TCR ligation. These data are important for understanding the molecular mechanisms of immunomodulation, particularly in tissues where Hh proteins or other Gli-activating ligands such as TGFβ are upregulated, including during inflammation, tissue damage and repair, and in tumour microenvironments.