Our previous study reported that cancer upregulated gene (CUG)2, a novel oncogene, induces both faster cell migration and anti-cancer drug resistance. We thus wonder whether CUG2 also induces sternness, a characteristic of cancer stem cells (CSCs) and further examine the molecular mechanism of this phenotype. To test that CUG2 induces sternness, we examined expression of sternness-related factors. Overexpression of CUG2 enhanced expression levels of sternness-related factors in human lung carcinoma A549 and immortalized bronchial BEAS-2B cells. Consequently, CUG2 increased cellular spherical cluster forming ability. Overexpression of CUG2 also induced tumor formation in xenotransplanted nude mice whereas transplantation of control cells failed to, implying that CUG2 possesses malignant tumorigenic potential. We paid attention to nucleophosmin (NPM1) for its known interaction with CUG2. Suppression of NPM1 hindered the CUG2-mediated sternness-like phenotypes and diminished TGF-beta transcriptional activity and signaling. TGF-beta increased sternness-like phenotypes in the control cells whereas TGF-13 inhibitor blocked induction of the phenotypes, indicating that NPM1 is required for CUG2-mediated sternness-like phenotypes through TGF-beta signaling. Furthermore, the suppression of Smad- and non-Smad-dependent TGF-beta signaling pathways also prevented CUG2 from inducing sternness-like phenotypes. Altogether, we suggest that the novel CUG2 oncogene promotes cellular transformation and sternness, mediated by nuclear NPM1 protein and TGF-alpha signaling. (C) 2019 Elsevier Inc. All rights reserved.