The epithelial-mesenchymal transition (EMT) endows carcinoma cells with phenotypic plasticity that can facilitate the formation of cancer stem cells (CSCs) and contribute to the metastatic cascade. While there is substantial support for the role of EMT in driving cancer cell dissemination, less is known about the intracellular molecular mechanisms that govern formation of CSCs via EMT. Here we show that β2 and β5 proteasome subunit activity is downregulated during EMT in immortalized human mammary epithelial cells. Moreover, selective proteasome inhibition enabled mammary epithelial cells to acquire certain morphologic and functional characteristics reminiscent of cancer stem cells, including CD44 expression, self-renewal, and tumor formation. Transcriptomic analyses suggested that proteasome-inhibited cells share gene expression signatures with cells that have undergone EMT, in part, through modulation of the TGF-β signaling pathway. These findings suggest that selective downregulation of proteasome activity in mammary epithelial cells can initiate the EMT program and acquisition of a cancer stem cell-like phenotype. As proteasome inhibitors become increasingly used in cancer treatment, our findings highlight a potential risk of these therapeutic strategies and suggest a possible mechanism by which carcinoma cells may escape from proteasome inhibitor-based therapy.