Pancreatic ductal adenocarcinoma (PDAC), one of the most aggressive human malignancies, is thought to be initiated by KRAS activation. Here we find that transcriptional activation mediated by the Gli family of transcription factors, although dispensable for pancreatic development, is required for Kras-induced proliferation and survival in primary pancreatic epithelial cells in culture and for Kras-driven pancreatic intraepithelial neoplasia and PDAC formation in vivo. Further, ectopic Gli1 activation in the mouse pancreas accelerates Kras-driven tumor formation, underscoring the importance of Gli transcription factors in pancreatic tumorigenesis. Interestingly, we demonstrate Gli-regulated I-kappa-B kinase epsilon (IKBKE) and NF-κB activity in pancreatic cancer cells and show that this activity is a critical downstream mediator for Gli-dependent PDAC cell transformation and survival. Together, these studies demonstrate the requirement for Gli in Kras-dependent pancreatic epithelial transformation, suggest a mechanism of Gli-NF-κB oncogenic activation, and provide genetic evidence supporting the therapeutic targeting of Gli activity in pancreatic cancer.