Annexin A1 (AnxA1), a phospholipid-binding protein and regulator of glucocorticoid-induced inflammatory signaling, has implications in cancer. Here, a role for AnxA1 in prostate adenocarcinoma was determined using primary cultures and a tumor cell line (cE1), all derived from the conditional Pten deletion mouse model of prostate cancer. AnxA1 secretion by prostate-derived cancer-associated fibroblasts (CAFs) was significantly higher than by normal prostate fibroblasts (NPFs). Prostate tumor cells were sorted to enrich for epithelial subpopulations based on non-hematopoietic lineage, high SCA-1, and high or medium levels of CD49f. Compared to controls, AnxA1 enhanced stem cell-like properties in high- and medium-expression subpopulations of sorted cE1 and primary cells: in vitro, through formation of greater number of spheroids with increased complexity; and in vivo, through generation of more, larger and histologically complex glandular structures, along with increased expression of p63, a basal/progenitor marker. The differentiated medium-expression subpopulations from cE1 and primary cells were most susceptible to gain stem cell-like properties as shown by increased spheroid and glandular formation. Further supporting this increased plasticity, AnxA1 was shown to regulate epithelial-to-mesenchymal transition (EMT) in cE1 cells. These results suggest that CAF-secreted AnxA1 contributes to tumor stem cell dynamics via two separate but complementary pathways: induction of a de-differentiation process leading to generation of stem-like cells from a subpopulation of cancer epithelial cells, and stimulation of proliferation and differentiation of the cancer stem-like cells.