Abstract Background Aberrant Sonic Hedgehog/Gli (Hh/Gli) signaling pathway is a critical regulator of Sonic hedgehog medulloblastoma (SHH-MB). Cancer stem cells (CSCs), thought to be largely responsible for tumor initiation, maintenance, dissemination and relapse, have been identified in SHH-MB. Since we previously demonstrated that Hh/Gli signaling controls CSCs features in SHH-MB and that in these tumors miR-326 is down regulated, here we investigated whether there is a functional link between Hh/Gli signaling and miR-326. Methods We evaluated β-arrestin1 (Arrb1) and its intragenic miR-326 levels in CSCs derived from SHH-MB. Subsequently, we modulated the expression of Arrb1 and miR-326 in CSCs in order to gain insight into their biological role. We also analyzed the mechanism by which Arrb1 and miR-326 control Hh/Gli signaling and self-renewal, using luciferase and protein immunoprecipitation assays. Results Low levels of Arrb1 and miR-326 represent a feature of CSCs derived from SHH-MB. We observed that re-expression of Arrb1 and miR-326 inhibits Hh/Gli signaling pathway at multiple levels, which cause impaired proliferation and self-renewal, accompanied by down regulation of Nanog levels. In detail, miR-326 negatively regulates two components of the Hh/Gli pathway the receptor Smoothened (Smo) and the transcription factor Gli2, whereas Arrb1 suppresses the transcriptional activity of Gli1, by potentiating its p300-mediated acetylation. Conclusions Our results identify a new molecular mechanism involving miR-326 and Arrb1 as regulators of SHH-MB CSCs. Specifically, low levels of Arrb1 and miR-326 trigger and maintain Hh/Gli signaling and self-renewal.