The predominant p63 isoform, ΔNp63, is a master regulator of normal epithelial stem cell (SC) maintenance. However, in vivo evidence of the regulation of cancer stem cell (CSC) properties by p63 is still limited. Here, we exploit the transgenic MMTV-ErbB2 (v-erb-b2 avian erythroblastic leukemia viral oncogene homolog 2) mouse model of carcinogenesis to dissect the role of p63 in the regulation of mammary CSC self-renewal and breast tumorigenesis. ErbB2 tumor cells enriched for SC-like properties display increased levels of ΔNp63 expression compared with normal mammary progenitors. Down-regulation of p63 in ErbB2 mammospheres markedly restricts self-renewal and expansion of CSCs, and this action is fully independent of p53. Furthermore, transplantation of ErbB2 progenitors expressing shRNAs against p63 into the mammary fat pads of syngeneic mice delays tumor growth in vivo. p63 knockdown in ErbB2 progenitors diminishes the expression of genes encoding components of the Sonic Hedgehog (Hh) signaling pathway, a driver of mammary SC self-renewal. Remarkably, p63 regulates the expression of Sonic Hedgehog (Shh), GLI family zinc finger 2 (Gli2), and Patched1 (Ptch1) genes by directly binding to their gene regulatory regions, and eventually contributes to pathway activation. Collectively, these studies highlight the importance of p63 in maintaining the self-renewal potential of mammary CSCs via a positive modulation of the Hh signaling pathway.