Soft tissue sarcoma (STS) is a highly malignant tumor with limited targeted therapies. A novel anaplastic lymphoma kinase (ALK) transcript, ALKATI, was identified recently and could be targeted by ALK inhibitors in melanoma. However, the clinical and functional role of aberrant ALKATI expression in STS remains unknown. Here we demonstrate that as a new ALK transcript, ALKATI is frequently found in STS. ALKATI expression correlates with a lower probability of progression-free survival in STS patients. Compared with the other ALK isoforms, ALKATI expresses not only in the cytoplasm, but also in the nucleus of sarcoma cells. Functionally, overexpression of ALKATI promoted cancer stem cell (CSC)-like properties in sarcoma cells by promoting sphere formation and upregulating the expression of stem cell markers. Moreover, the ALK inhibitors not only suppressed the oncogenic functions of ALKATI but also attenuated ALKATI-induced CSC-like properties by reducing the expression of stem cell markers such as c-Myc, ABCG2, BMI1, and OCT4 both in vitro and in vivo. Furthermore, ALKATI interacted with c-Myc and increased the binding of c-Myc to the ABCG2 promoter, resulting in the induction of stem cell-like properties. Together, these findings indicate that ALKATI may be a potential prognostic marker and therapeutic target for STS patients harboring such ALK aberrations.