Similar to normal tissue stem cells, cancer stem cells (CSCs) are thought to be quiescent or slow-cycling and, thereby, insensitive to chemo- and radiotherapies. CD44, a cell surface component that interacts with the extracellular matrix, has been found to be highly expressed in CSCs of several solid tumors. However, the relevancy between CD44(+) cells and slow-cycling cells and the underlying mechanisms for the emergence of CD44(+) CSCs during tumorigenesis have not been elucidated. Here we show that a gastric gland residing at the squamo-columnar junction (SCJ) in normal mouse stomach contains CD44(+) stem cell-like slow-cycling cells and that this characteristic CD44(+) gland was expanded by prostaglandin E2 (PGE(2)) and Wnt signaling in K19-Wnt1/C2mE mouse, a genetic mouse model for gastric tumorigenesis. The analysis of three transgenic mouse lines, K19-Wnt1, K19-C2mE and K19-Wnt1/C2mE, revealed that the expansion of CD44(+) SCJ cells is triggered by PGE(2)-mediated signaling and is prominently enhanced by the addition of Wnt activation. Furthermore, each expanded CD44(+) gland in gastric tumor of K19-Wnt1/C2mE mouse contains a few BrdU label-retaining quiescent or slow-cycling cells, suggesting that the CD44(+) SCJ cells in normal mouse are candidates for the cell-of-origin of gastric CSCs. These observations suggest that PGE(2)-mediated inflammatory signaling and Wnt signaling cooperatively trigger the expansion of CD44(+) slow-cycling stem-like cells in SCJ, leading to development of lethal gastric tumors in mice.