Expansion of limbal epithelial stem cells (LSCs) is crucial for the success of limbal transplantation. Previous studies showed that pigment epithelium-derived peptide (PEDF) short peptide 44-mer could effectively expand LSCs and maintain them in a stem-cell state， but the mechanism remained unclear. In the current study， we found that pharmacological inhibition of Sonic Hedgehog (SHh) activity reduced the LSC holoclone number and suppressed LSC proliferation in response to 44-mer. In mice subjected to focal limbal injury， 44-mer facilitated the restoration of the LSC population in damaged limbus， and such effect was impeded by the SHh or ATGL (a PEDF receptor) inhibitor. Furthermore， we showed that 44-mer increased nuclear translocation of Gli1 and Gli3 in LSCs. Knockdown of Gli1 or Gli3 suppressed the ability of 44-mer to induce cyclin D1 expression and LSC proliferation. In addition， ATGL inhibitor suppressed the 44-mer-induced phosphorylation of STAT3 at Tyr705 in LSC. Both inhibitors for ATGL and STAT3 attenuated 44-mer-induced SHh activation and LSC proliferation. In conclusion， our data demonstrate that SHh-Gli pathway driven by ATGL/STAT3 signalling accounts for the 44-mer-mediated LSC proliferation.