Ionizing radiation and cumulative exposure to steroid hormones are known risk factors for breast cancer. There is increasing evidence that breast tumors are driven by a subpopulation of tumor-initiating cancer stem cells (CSCs). In MCF10A non-cancerous basal-like PR− cells, progesterone treatment and X-rays generated ALDH+ and CD44+/CD24− CSCs. Here, we report that in irradiated MCF10A cells, progesterone activated the PI3K/Akt pathway via membrane progesterone receptor (mPR). Inhibition of the PI3K/Akt pathway counteracted the generation of CSCs by progesterone and irradiation. The stimulation of PI3K/Akt via mPR resulted in the inactivation of FOXO transcriptional activity, the upregulation of snail and slug expression and a downregulation of miR-29 expression, which led to increased levels of KLF4, a transcription factor required for breast CSC maintenance. Stabilization of miR-29 expression impeded the generation of CSCs, while its inhibition alone was sufficient to generate CSCs. This study provides a new mechanistic basis for progesterone and radiation-induced breast cancer risk in basal cells. In addition, the elucidation of new pathways and miRNA regulations involved in CSC generation and maintenance may open the door to potential novel anti-CSC strategies.