We generated a transgenic line Tg(k18:shh:RFP) with overexpression of Sonic hedgehog in the skin epidermis. By 5 day-post-fertilization (dpf), many epidermal lesions were clearly observed, including a swollen yolk sac, epidermis growth malformation around the eyes and at the basement of the pectoral fins. Skin histology revealed embryos derived from Tg(k18:shh:RFP) displayed an elevated Nuclear/Cytoplasmic ratio and pleomorphic nuclei compared to their wild type littermates, suggesting the abnormal growth pattern on the epidermis of Tg(k18:shh:RFP) embryos were dysplasia. Later (by 7 dpf), Tg(k18:shh:RFP) embryos displayed broader pectoral fins which are similar to the polydactyly phenotypes of Nevoid basal cell carcinoma syndrome (NBCCS)/Gorlin patients and polydactylous mice. In addition, treatment with cyclopamine is able to enhance and prolong the survival rates and survival durations of Tg(k18:shh:RFP) embryos. In conclusion, this unique Tg(k18:shh:RFP) fish line, should be an excellent experimental animal for screening for a lower toxicity level of the new Hh-inhibitor and can even be used as a new anti-cancer drug-screening platform.