Abstract Glioblastoma (GBM) is a complex ecosystem that includes a heterogeneous tumor population and the tumor-immune microenvironment (TIME), prominently containing tumor-associated macrophages (TAM) and microglia. Here, we demonstrated that β2-microglobulin (B2M), a subunit of the class I major histocompatibility complex (MHC-I), promotes the maintenance of stem-like neoplastic populations and reprograms the TIME to an anti-inflammatory, tumor-promoting state. B2M activated PI3K/AKT/mTOR signaling by interacting with PIP5K1A in GBM stem cells (GSC) and promoting MYC-induced secretion of transforming growth factor-β1 (TGFβ1). Inhibition of B2M attenuated GSC survival, self-renewal, and tumor growth. B2M-induced TGFβ1 secretion activated paracrine SMAD and PI3K/AKT signaling in TAMs and promoted an M2-like macrophage phenotype. These findings reveal tumor-promoting functions of B2M and suggest that targeting B2M or its downstream axis may provide an effective approach for treating GBM. Significance: β2-microglobulin signaling in glioblastoma cells activates a PI3K/AKT/MYC/TGFβ1 axis that maintains stem cells and induces M2-like macrophage polarization, highlighting potential therapeutic strategies for targeting tumor cells and the immunosuppressive microenvironment in glioblastoma.