Human lung adenosquamous cell carcinoma (LUAS), containing both adenomatous and squamous pathologies, exhibits strong cancer plasticity. We find that ALK rearrangement is detectable in 5.1–7.5% of human LUAS, and transgenic expression of EML4-ALK drives lung adenocarcinoma (LUAD) formation initially and squamous transition at late stage. We identify club cells as the main cell-of-origin for squamous transition. Through recapitulating lineage transition in organoid system, we identify JAK-STAT signaling, activated by EML4-ALK phase separation, significantly promotes squamous transition. Integrative study with scRNA-seq and immunostaining identify a plastic cell subpopulation in ALK-rearranged human LUAD showing squamous biomarker expression. Moreover, those relapsed ALK-rearranged LUAD show notable upregulation of squamous biomarkers. Consistently, mouse squamous tumors or LUAD with squamous signature display certain resistance to ALK inhibitor, which can be overcome by combined JAK1/2 inhibitor treatment. This study uncovers strong plasticity of ALK-rearranged tumors in orchestrating phenotypic transition and drug resistance and proposes a potentially effective therapeutic strategy.