Cancer stem cells (CSCs) are considered to be responsible for the dismal prognosis of cancer patients. However, little is known about the molecular mechanisms underlying the acquisition and maintenance of CSC properties in cancer cells because of their rarity in clinical samples. We herein induced CSC properties in cancer cells using defined factors. We retrovirally introduced a set of defined factors (OCT3/4, SOX2 and KLF4) into human colon cancer cells, followed by culture with conventional serum-containing medium, not human embryonic stem cell medium. We then evaluated the CSC properties in the cells. The colon cancer cells transduced with the three factors showed significantly enhanced CSC properties in terms of the marker gene expression, sphere formation, chemoresistance and tumorigenicity. We designated the cells with CSC properties induced by the factors, a subset of the transduced cells, as induced CSCs (iCSCs). Moreover, we established a novel technology to isolate and collect the iCSCs based on the differences in the degree of the dye-effluxing activity enhancement. The xenografts derived from our iCSCs were not teratomas. Notably, in contrast to the tumors from the parental cancer cells, the iCSC-based tumors mimicked actual human colon cancer tissues in terms of their immunohistological findings, which showed colonic lineage differentiation. In addition, we confirmed that the phenotypes of our iCSCs were reproducible in serial transplantation experiments. By introducing defined factors, we generated iCSCs with lineage specificity directly from cancer cells, not via an induced pluripotent stem cell state. The novel method enables us to obtain abundant materials of CSCs that not only have enhanced tumorigenicity, but also the ability to differentiate to recapitulate a specific type of cancer tissues. Our method can be of great value to fully understand CSCs and develop new therapies targeting CSCs.