Cancer stem cells (CSCs) represent a major source of treatment resistance and tumor progression. However, regulation of CSCs stemness is not entirely understood. Here, we report that TSPAN8 expression is upregulated in breast CSCs, promotes the expression of the stemness gene NANOG, OCT4, and ALDHA1, and correlates with therapeutic resistance. Mechanistically, TSPAN8 interacts with PTCH1 and inhibits the degradation of the SHH/PTCH1 complex through recruitment of deubiquitinating enzyme ATXN3. This results in the translocation of SMO to cilia, downstream gene expression, resistance of CSCs to chemotherapeutic agents, and enhances tumor formation in mice. Accordingly, expression levels of TSPAN8, PTCH1, SHH, and ATXN3 are positively correlated in human breast cancer specimens, and high TSPAN8 and ATXN3 expression levels correlate with poor prognosis. These findings reveal a molecular basis of TSPAN8-enhanced Sonic Hedgehog signaling and highlight a role for TSPAN8 in promoting cancer stemness.