Type I interferons (IFNs) are known to mediate antineoplastic effects during tumor progression. Type I IFNs can be produced by multiple cell types in the tumor microenvironment; however, the molecular mechanisms by which tumor cells evade the inhibition of immune microenvironment remain unknown. Here we demonstrate that glioma stem-like cells (GSCs) evade type I IFN suppression through downregulation of STAT1 to initiate tumor growth under inhospitable conditions. The downregulation of STAT1 is mediated by MBD3, an epigenetic regulator. MBD3 is preferentially expressed in GSCs and recruits NuRD complex to STAT1 promoter to suppress STAT1 expression by histone deacetylation. Importantly, STAT1 overexpression or MBD3 depletion induces p21 transcription, resensitizes GSCs to IFN suppression, attenuates GSC tumor growth, and prolongs animal survival. Our findings demonstrate that inactivation of STAT1 signaling by MBD3/NuRD provides GSCs with a survival advantage to escape type I IFN suppression, suggesting that targeting MBD3 may represent a promising therapeutic opportunity to compromise GSC tumorigenic potential.