Stem cells have been isolated by their ability to efflux Hoechst 33342 dye and are referred to as the “side population” (SP). In this study, we used flow cytometry and Hoechst 33342 dye efflux assay to isolate and characterize SP cells from six human lung cancer cell lines (H460, H23, HTB-58, A549, H441, and H2170). Nonobese diabetic/severe combined immunodeficiency xenograft experiments showed that SP cells were enriched in tumor-initiating capability compared with non-SP cells. Matrigel invasion assay showed that SP cells also have higher potential for invasiveness. Further characterization of this SP phenotype revealed several stem cell properties. We found evidence for repopulating ability by SP to regenerate a population resembling the original population. SP displayed elevated expression of ABCG2 as well as other ATP-binding cassette transporters and showed resistance to multiple chemotherapeutic drugs. Human telomerase reverse transcriptase expression was higher in the SP, suggesting that this fraction may represent a reservoir with unlimited proliferative potential for generating cancer cells. mRNA levels of minichromosome maintenance (MCM) 7, a member of the MCM family of proteins critical to the DNA replication complex, were lower in SP cells, suggesting that a majority of the SP fraction was in the G₀ quiescent state. Sixteen clinical lung cancer samples also displayed a smaller but persistent SP population. These findings indicate that SP is an enriched source of lung tumor–initiating cells with stem cell properties and may be an important target for effective therapy and a useful tool to investigate the tumorigenic process. [Cancer Res 2007;67(10):4827–33]