Purpose: Glioblastoma multiforme is a lethal cancer that responds poorly to therapy. Glioblastoma multiforme cancer-initiating cells have been shown to mediate resistance to both chemotherapy and radiation; however, it is unknown to what extent these cells contribute to the profound immunosuppression in glioblastoma multiforme patients and if strategies that alter their differentiation state can reduce this immunosuppression. Experimental Design: We isolated a subpopulation of cells from glioblastoma multiforme that possessed the capacity for self-renewal, formed neurospheres in vitro , were capable of pluripotent differentiation, and could initiate tumors in vivo . The immune phenotype of these cells was characterized including the elaboration of immunosuppressive cytokines and chemokines by ELISA. Functional immunosuppressive properties were characterized based on the inhibition of T-cell proliferation and effector responses, triggering of T-cell apoptosis, and induction of FoxP3 + regulatory T cells. On altering their differentiation state, the immunosuppressive phenotype and functional assays were reevaluated. Results: We found that the cancer-initiating cells markedly inhibited T-cell proliferation and activation, induced regulatory T cells, and triggered T-cell apoptosis that was mediated by B7-H1 and soluble Galectin-3. These immunosuppressive properties were diminished on altering the differentiation of the cancer-initiating cells. Conclusion: Cancer-initiating cells contribute to tumor evasion of the immunosurveillance and approaches that alter the differentiation state may have immunotherapeutic potential. Clin Cancer Res; 16(2); 461–73