Abstract Chemotherapy and radiation are often employed to decrease breast cancer deaths. However, patients with metastatic disease invariably manifest resistance to chemotherapy and/or radiation, ultimately causing breast cancer deaths due to ineffective treatment. We have defined a gene expression signature, the interferon-related DNA damage resistance signature (IRDS), that is highly associated with radiation and chemotherapy resistance of breast cancer in both cell lines and patients. Interestingly, IRDS-mediated resistance in experimental models appears to be much greater in vivo than in vitro, suggesting a potential contribution of the tumor microenvironment. To address the question of whether the tumor microenvironment plays a role in IRDS-mediated radioresistance, we investigated the influence of heterotypic interactions between breast cancer and stromal cells on IRDS expression. We found that breast cancer cell lines primarily of the basal subtype increase IRDS expression after tumor-stroma interaction, resulting in enhanced resistance to radiation and chemotherapy. This increase in IRDS and DNA damage resistance depends on STAT1, a member and transcriptional regulator of the IRDS. Tumor-stroma interaction also leads to induction of a population of breast cancer cells with properties of breast cancer stem-like cells (BCSC). Evaluation of a tumor-stroma extracellular interactome revealed that a stroma-directed NOTCH signaling pathway can cooperate with STAT1 signaling to regulate common target genes. STAT1 and NOTCH signaling direct the expansion and/or survival of BCSC, an inherently DNA damage resistant population. Using available primary breast cancer data sets, a similar activation of NOTCH signaling is observed, as well as transcriptomic activation of the NOTCH pathway in breast cancer. Importantly, a marker for NOTCH signaling cooperates with the IRDS to identify breast cancer patients likely to fail adjuvant chemotherapy. The ability of gamma secretase inhibitors to inhibit both stroma-mediated expansion of BCSC and DNA damage resistance highlights the therapeutic potential of this class of targeted agents for breast cancers that express the IRDS. In conclusion, our data suggests that stroma can regulate DNA damage resistant BCSC populations in a subset of basal breast cancers through STAT1 and NOTCH signaling. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 103rd Annual Meeting of the American Association for Cancer Research; 2012 Mar 31-Apr 4; Chicago, IL. Philadelphia (PA): AACR; Cancer Res 2012;72(8 Suppl):Abstract nr 1505. doi:1538-7445.AM2012-1505