Heparanase is known to enhance the progression of many cancer types and is associated with poor patient prognosis. We recently reported that after patients with multiple myeloma were treated with high dose chemotherapy, the tumor cells that emerged upon relapse expressed a much higher level of heparanase than was present prior to therapy. Because tumor cells having stemness properties are thought to seed tumor relapse, we investigated whether heparanase had a role in promoting myeloma stemness. When plated at low density and grown in serum-free conditions that support survival and expansion of stem-like cells, myeloma cells expressing a low level of heparanase formed tumor spheroids poorly. In contrast, cells expressing a high level of heparanase formed significantly more and larger spheroids than did the heparanase low cells. Importantly, heparanase-low expressing cells exhibited plasticity and were induced to exhibit stemness properties when exposed to recombinant heparanase or to exosomes that contained a high level of heparanase cargo. The spheroid-forming heparanase-high cells had elevated expression of GLI1, SOX2 and ALDH1A1, three genes known to be associated with myeloma stemness. Inhibitors that block the heparan sulfate degrading activity of heparanase significantly diminished spheroid formation and expression of stemness genes implying a direct role of the enzyme in regulating stemness. Blocking the NF-κB pathway inhibited spheroid formation and expression of stemness genes demonstrating a role for NF-κB in heparanase-mediated stemness. Myeloma cells made deficient in heparanase exhibited decreased stemness properties in vitro and when injected into mice they formed tumors poorly compared to the robust tumorigenic capacity of cells expressing higher levels of heparanase. These studies reveal for the first time a role for heparanase in promoting cancer stemness and provide new insight into its function in driving tumor progression and its association with poor prognosis in cancer patients.