Mouse studies indicate that the synthetic glucocorticoid dexamethasone (Dex) impairs the proliferation of granule neuron precursors in the cerebellum, which are transformed to medulloblastoma by activation of Sonic hedgehog (Shh) signaling. Here, we show that Dex treatment also inhibits Shh-induced tumor growth, enhancing the survival of tumor-prone transgenic mice. We found that Nmyc was specifically required in granule cells for Shh-induced tumorigenesis and that Dex acted to reduce Nmyc protein levels. Moreover, we found that Dex-induced destabilization of Nmyc is mediated by activation of glycogen synthase kinase 3beta, which targets Nmyc for proteasomal degradation. Together, our findings show that Dex antagonizes Shh signaling downstream of Smoothened in medulloblastoma.