Cancer stem cells (CSC) play critical roles in cancer initiation, progression, and therapeutic refractoriness. Although many studies have focused on the genes and pathways involved in stemness, characterization of the factors in the tumor microenvironment that regulate CSCs is lacking. In this study, we investigated the effects of stromal fibroblasts on breast cancer stem cells. We found that compared with normal fibroblasts, primary cancer-associated fibroblasts (CAF) and fibroblasts activated by cocultured breast cancer cells produce higher levels of chemokine (C-C motif) ligand 2 (CCL2), which stimulates the stem cell–specific, sphere-forming phenotype in breast cancer cells and CSC self-renewal. Increased CCL2 expression in activated fibroblasts required STAT3 activation by diverse breast cancer–secreted cytokines, and in turn, induced NOTCH1 expression and the CSC features in breast cancer cells, constituting a cancer-stroma-cancer signaling circuit. In a xenograft model of paired fibroblasts and breast cancer tumor cells, loss of CCL2 significantly inhibited tumorigenesis and NOTCH1 expression. In addition, upregulation of both NOTCH1 and CCL2 was associated with poor differentiation in primary breast cancers, further supporting the observation that NOTCH1 is regulated by CCL2. Our findings therefore suggest that CCL2 represents a potential therapeutic target that can block the cancer–host communication that prompts CSC-mediated disease progression. Cancer Res; 72(11); 2768–79. ©2012 AACR.