Abstract The microenvironment of solid tumors contains regions of poor oxygenation as a result of hypoxia, which is associated with high grade breast cancer and poor prognosis. However, critical regulatory mechanism linking tumor microenvironment to cancer progression remains unclear. Cancer stem cells (tumor initiating cells) are suggested to be responsible for initiation and aggressive progression of cancer. It is recently proposed that an aggressive secondary cancer stem cell population arises from a primary cancer stem cell population through acquisition of additional genomic/genetic mutations and drives cancer progression. Additionally, high expression of a Polycomb protein EZH2, essential in stem cell self-renewal, has been linked to aggressive progression of breast cancer. Here, we discovered that hypoxic microenvironment upregulates HIF1α-mediated transcriptional activation of EZH2 in CD44+CD24−/low breast tumor initiating cells (BTICs) isolated from several human primary tumor samples. Enhanced EZH2 expression was required for the hypoxia-promoted BTICs, where hypoxia significantly increased BTIC abundance, tumor sphere formation and tumor growth in mammary fat pads implanted with less than 500 primary BTICs. Using cDNA expression array and genome wide SNP array analysis, we further identified a novel mechanism in which enhanced expression of EZH2 by hypoxia downregulates DNA damage repair proteins through H3K27 methylation and thereby allows the acquisition of recurrent genomic abnormalities such as RAF1 gene amplification in BTICs. Using proteomic analysis, we demonstrated that RAF1 amplification highly activates its downstream ERK-β-catenin signaling, which leads to enhanced survival and proliferation of the BTICs. Furthermore, using immunohistochemistry analysis in a cohort of breast tumor samples, we found that EZH2 expression is positively correlated with RAF1, p-ERK and β-catenin expression in the high grade, poorly-differentiated tumors but not in the low grade, well-differentiated tumors, suggesting EZH2-amplified RAF1-ERK-β-catenin signaling may contribute significantly to promote BTICs and aggravate breast cancer malignancy. Our data also reveal that AZD6244, a clinical trial drug that inhibits RAF1-ERK signaling, can significantly suppress EZH2-promoted BTICs. To the best of our knowledge, this is the first study that provides evidences linking a specific genomic aberration mediated by EZH2-impaired DNA damage response to expansion of BTICs. Together, this study elucidates a previously unidentified therapeutic effect of RAF1-ERK signaling inhibitors to prevent breast cancer progression by eliminating BTICs. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 102nd Annual Meeting of the American Association for Cancer Research; 2011 Apr 2-6; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2011;71(8 Suppl):Abstract nr 976. doi:10.1158/1538-7445.AM2011-976