Overexpression of the adverse prognostic marker ERBB2 occurs in 30% of breast cancers and is associated with aggressive disease and poor outcomes. Our recent findings have shown that NR1D1 and the peroxisome proliferator-activated receptor-γ (PPARγ)-binding protein (PBP) act through a common pathway in upregulating several genes in the de novo fatty acid synthesis network, which is highly active in ERBB2-positive breast cancer cells. NR1D1 and PBP are functionally related to PPARγ, a well-established positive regulator of adipogenesis and lipid storage. Here, we report that inhibition of the PPARγ pathway reduces the aldehyde dehydrogenase (ALDH)-positive population in ERBB2-positive breast cancer cells. Results from in vitro tumorsphere formation assays demonstrate that the PPARγ antagonists GW9662 and T0070907 decrease tumorsphere formation in ERBB2-positive cells, but not other breast cells. We show that the mechanism by which GW9662 treatment causes a reduction in ALDH-positive population cells is partially due to ROS, as it can be rescued by treatment with N-acetyl-cysteine. Furthermore, global gene expression analyses show that GW9662 treatment suppresses the expression of several lipogenic genes, including ACLY, MIG12, FASN and NR1D1, and the stem-cell related genes KLF4 and ALDH in BT474 cells. Antagonist treatment also decreases the level of acetylation in histone 3 and histone 4 in BT474 cells, compared with MCF7 cells. In vivo, GW9662 pre-treatment inhibits the tumor-seeding ability of BT474 cells. Together, these results show that the PPARγ pathway is critical for the cancer stem cell properties of ERBB2-positive breast cancer cells.