Epithelial membrane protein 3 (EMP3) is a transmembrane glycoprotein that contains a peripheral myelin protein 22 domain. EMP3 first received attention as a tumor suppressor, but accumulating evidence has since suggested that it may exhibit a tumor-promoting function. Nonetheless, the biological function of EMP3 remains largely unclear with regards to its role in cancer. Herein, it was shown that EMP3 expression is upregulated in non-small cell lung cancer (NSCLC) cells overexpressing aldehyde dehydrogenase 1 (ALDH1). EMP3 was shown to be involved in cell proliferation, the formation of cancer stem cells (CSCs) and in epithelial-mesenchymal transition (EMT). The ability to resist irradiation, one of the characteristics of CSCs, decreased when the EMP3 mRNA expression was knocked down using small interfering RNA. In addition, when EMP3 knockdown reduced the migratory ability of cells, a characteristic of EMT. Additionally, it was shown that the TGF-β/Smad signaling axis was a target of EMP3. EMP3 was found to interact with TGF-β receptor type 2 (TGFBR2) upon TGF-β stimulation in lung CSCs (LCSC). As a result, binding of EMP3-TGFBR2 regulates TGF-β/Smad signaling activation and consequently affects CSCs and EMT. Kaplan-Meier analysis results confirmed that patients with high expression of EMP3 had poor survival rates. Taken together, these findings showed that EMP3 may be a potential target for management of LCSCs with high expression of ALDH1, and that EMP3 is involved in TGF-β/Smad signaling activation where it promotes acquisition of cancerous properties in tumors.