CD44 plays a role in the progression of tumors and is expressed in cancer stem cells (CSCs). However, the mechanisms underlying the crosstalk of CD44 with stemness genes in CSC maintenance remains unclear. In this study, we demonstrated how the cleaved intracellular domain of CD44 (CD44ICD) activates stemness factors such as Nanog, Sox2 and Oct4, and contributes to the tumorigenesis of breast cancer. We have found that the overexpression of CD44ICD increased mammosphere formation in breast cancer cells. Treatment with a γ-secretase inhibitor (GSI), which blocks the cleavage of CD44ICD, interfered with mammosphere formation. Interestingly, CD44ICD decreased the expression levels and nuclear localization of stemness factors, but overexpression of CD44ICD reversed these effects. In addition, we showed that nuclear localization of CD44ICD is important for transcriptional activation of the stemness factors. Furthermore, CD44ICD-overexpressed cells exhibited strong tumorigenecity and greater metastatic potential than did the control cells or CD44-depleted cells in vivo in mice models. Taken together, it was supposed that CD44 promotes tumorigenesis through the interaction and nuclear-translocation of its intracellular domain and stemness factors. We suggest that the prevention of cleavage and nuclear-translocation of CD44ICD is a potential target in treating breast cancer.