We propose a novel two-stage Gene Set Gibbs Sampling (GSGS) framework, to reverse engineer signaling pathways from gene sets inferred from molecular profiling data. We hypothesize that signaling pathways are structurally an ensemble of overlapping linear signal transduction events which we encode as Information Flow Gene Sets (IFGSs). We infer pathways from gene sets corresponding to these events subjected to a random permutation of genes within each set. In Stage I, we use a source separation algorithm to derive unordered and overlapping IFGSs from molecular profiling data, allowing cross talk among IFGSs. In Stage II, we develop a Gibbs sampling like algorithm, Gene Set Gibbs Sampler, to reconstruct signaling pathways from the latent IFGSs derived in Stage I. The novelty of this framework lies in the seamless integration of the two stages and the hypothesis of IFGSs as the basic building blocks for signal pathways. In the proof-of-concept studies, our approach is shown to outperform the existing Bayesian network approaches using both continuous and discrete data generated from benchmark networks in the DREAM initiative. We perform a comprehensive sensitivity analysis to assess the robustness of the approach. Finally, we implement the GSGS framework to reconstruct signaling pathways in breast cancer cells.