Many lines of evidence have indicated that both genetic and non-genetic determinants can contribute to intra-tumor heterogeneity and influence cancer outcomes. Among the best described sub-population of cancer cells generated by non-genetic mechanisms are cells characterized by a CD44+/CD24- cell surface marker profile. Here, we report that human CD44+/CD24- cancer cells are genetically highly unstable because of intrinsic defects in their DNA-repair capabilities. In fact, in CD44+/CD24- cells, constitutive activation of the TGF-beta axis was both necessary and sufficient to reduce the expression of genes that are crucial in coordinating DNA damage repair mechanisms. Consequently, we observed that cancer cells that reside in a CD44+/CD24- state are characterized by increased accumulation of DNA copy number alterations, greater genetic diversity and improved adaptability to drug treatment. Together, these data suggest that the transition into a CD44+/CD24- cell state can promote intra-tumor genetic heterogeneity, spur tumor evolution and increase tumor fitness.