The Hedgehog (Hh) signaling pathway is a critical transduction system regulating cell proliferation, differentiation, and tissue homeostasis during embryonic development. Its aberrant activation is closely associated with the pathogenesis of malignancies such as basal cell carcinoma and medulloblastoma. Although Smoothened (SMO)-targeting inhibitors have received clinical approval, their therapeutic efficacy is limited by acquired resistance mutation and compensatory pathway activation. Glioma-associated oncogene homolog 1 (GLI1), the terminal effector transcription factor of the Hh pathway, has emerged as a promising therapeutic target due to its tumor-specific overexpression and lower propensity for resistance induction. However, GLI1 is classified as an "undruggable" target due to the absence of well-defined ligand-binding pockets, low inhibitory activity, and poor drug-like properties. Currently, no GLI1 inhibitor has entered clinical trials. This review systematically analyzes multidimensional modulation strategies (e.g., allosteric modulation, protein-protein interaction disruption, targeted protein degradation) for targeting transcription factors, based on the structural and functional features of GLI1-DNA interaction combined with recent advances in structural biology and chemical biology, offering new paradigms to overcome therapeutic barriers against undruggable targets.