Cancer stem-like cells (CSC) evolve to overcome the pressures of reduced oxygen, nutrients or chemically induced cell death, but the mechanisms driving this evolution are incompletely understood. Here, we report that hypoxia-mediated downregulation of the dual specificity phosphatase 2 (DUSP2) is critical for the accumulation of CSC in colorectal cancer. Reduced expression of DUSP2 led to overproduction of COX-2-derived prostaglandin E , which promoted cancer stemness via the EP2/EP4 signaling pathways. Genetic and pharmacological inhibition of PGE biosynthesis or signal transduction ameliorated loss-of-DUSP2-induced tumor growth and cancer stemness. Genome-wide profile analysis revealed that genes regulated by DUSP2 were similar to those controlled by histone deacetylase. Indeed, treatment with novel histone deacetylase inhibitors abolished hypoxia-induced DUSP2 downregulation, COX-2 overexpression, cancer stemness, tumor growth, and drug resistance. Our findings illuminate mechanisms of cancer stemness and suggest new cancer therapy regimens. .