Cancer-associated fibroblasts (CAFs) are one of the most prominent cell types in the stromal compartment of the tumor microenvironment. CAFs support multiple aspects of cancer progression, including tumor initiation, invasion, and metastasis. The heterogeneous nature of the stromal microenvironment is attributed to the multiple sources from which the cells in this compartment originate. The present study provides the first evidence that cancer stem cells (CSCs) are one of the key sources of CAFs in the tumor niche. We generated CSC-like cells by treating mouse induced pluripotent stem cells with conditioned medium from breast cancer cell lines. The resulting cell population expressed both CSC and pluripotency markers, and the sphere-forming CSC-like cells formed subcutaneous tumors in nude mice. Intriguingly, these CSC-like cells always formed heterogeneous populations surrounded by myofibroblast-like cells. Based on this observation, we hypothesized that CSCs could be the source of the CAFs that support tumor maintenance and survival. To address this hypothesis, we induced the differentiation of spheres and purified the myofibroblast-like cells. The resulting cells exhibited a CAF-like phenotype, suggesting that they had differentiated into the subpopulations of cells that support CSC self-renewal. These findings provide novel insights into the dynamic interplay between various microenvironmental factors and CAFs in the CSC niche.