Description: Consequences of the obesity epidemic on cancer morbidity and mortality are not fully appreciated. Obesity is a risk factor for many cancers, but the mechanisms by which it contributes to cancer development and patient outcome have yet to be fully elucidated. Here, we examined the effects of coculturing human-derived adipocytes with established and primary breast cancer cells on tumorigenic potential. We found that the interaction between adipocytes and cancer cells increased the secretion of proinflammatory cytokines. Prolonged culture of cancer cells with adipocytes or cytokines increased the proportion of mammosphere-forming cells and of cells expressing stem-like markers in vitro. Furthermore, contact with immature adipocytes increased the abundance of cancer cells with tumor-forming and metastatic potential in vivo. Mechanistic investigations demonstrated that cancer cells cultured with immature adipocytes or cytokines activated Src, thus promoting Sox2, c-Myc, and Nanog upregulation. Moreover, Sox2-dependent induction of miR-302b further stimulated cMYC and SOX2 expression and potentiated the cytokine-induced cancer stem cell–like properties. Finally, we found that Src inhibitors decreased cytokine production after coculture, indicating that Src is not only activated by adipocyte or cytokine exposures, but is also required to sustain cytokine induction. These data support a model in which cancer cell invasion into local fat would establish feed-forward loops to activate Src, maintain proinflammatory cytokine production, and increase tumor-initiating cell abundance and metastatic progression. Collectively, our findings reveal new insights underlying increased breast cancer mortality in obese individuals and provide a novel preclinical rationale to test the efficacy of Src inhibitors for breast cancer treatment. Cancer Res; 76(2); 491–504. ©2016 AACR.