Given its extremely poor prognosis, there is a pressing need for an improved understanding of the biology of glioblastoma multiforme (GBM), including the roles of tumor subpopulations that may contribute to their growth rate and therapy resistance. The most malignant phenotypes of GBM have been ascribed to the presence of subpopulations of cancer stem cells (CSCs), which are resistant to chemotherapeutic drugs and ionizing radiation and which promote invasiveness and metastasis. The mechanisms by which the CSC state is obtained and by which it promotes tumor maintenance are only beginning to emerge. We hypothesize that M2 polarized macrophages may affect CSC phenotypes via cell-cell communication. We investigated the interplay between glioma CSCs and macrophages via co-culture. The invasiveness of CSCs in the absence and presence of macrophages was assessed using collagen degradation and Transwell migration assays. The role of STAT3 as a CSC phenotypic mediator was assessed using siRNA-mediated gene silencing. We found that the levels of a M2 macrophage-specific secreted cytokine, TGF-β1, were elevated in the presence of CSCs, regardless of whether the cells were plated as contacting or non-contacting co-cultures. In addition, we found that the co-culture resulted in enhanced expression of M2 markers in macrophages that were previously polarized to the M1 phenotype. siRNA-mediated STAT3 silencing was found to reduce the chemo-responsiveness and migratory abilities of the CSCs. Combination treatment of STAT3 siRNA and DNA alkylating agents was found to further abrogate CSC functions. Our data indicate that the co-culture of CSCs and macrophages results in bi-directional signaling that alters the phenotypes of both cell types. These results provide an explanation for recently observed effects of macrophages on GBM tumor cell growth, motility and therapeutic resistance, and suggest potential therapeutic strategies to disrupt the CSC phenotype by impairing its communication with macrophages.