Increasing evidence supports the idea that cancer cell plasticity promotes metastasis and tumor recurrence, resulting in patient mortality. While it is clear that the tumor microenvironment (TME) contributes to cancer cell plasticity, the specific TME factors most actively controlling plasticity remain largely unknown. Here, we performed a screen to identify TME cytokines and growth factors that promote epithelial–mesenchymal plasticity, and acquisition of cancer stem cell (CSC) properties. Of 28 TME cytokines and growth factors tested, we identified Oncostatin M (OSM) as the most potent inducer of mesenchymal/CSC properties. OSM-induced plasticity was Signal Transducer and Activator of Transcription 3 (STAT3)-dependent, and also required a novel intersection with transforming growth factor-β (TGF-β)/SMAD signaling. OSM/STAT3 activation promoted SMAD3 nuclear accumulation, DNA binding and induced SMAD3-dependent transcriptional activity. Suppression of TGF-β receptor activity or ablation of SMAD3 or SMAD4, but not SMAD2, strongly suppressed OSM/STAT3-mediated plasticity. Moreover, removal of OSM or inhibition of STAT3 or SMAD3 resulted in a marked reversion to a non-invasive, epithelial phenotype. We propose that targeted blockade of the STAT3/SMAD3 axis in tumor cells may represent a novel therapeutic approach to prevent the plasticity required for metastatic progression and tumor recurrence.