Glioblastoma (GBM) is the most common type of primary adult brain tumor. Glioma stem cell (GSC) residence and Temozolomide (TMZ) resistance in GBM both contribute to poor patient outcome. TRAF4 is a scaffold protein with E3 ubiquitin ligase activity that has recently been discovered to promote invasion and metastasis in several malignancies, but the effects and functions of TRAF4 in GBM remain to be determined. Here, we report that TRAF4 is preferentially overexpressed in GSCs and is required for stem-like properties as well as TMZ sensitivity in GBM cells. TRAF4 specifically interacted with the N-terminal tail of Caveolin-1 (CAV1), an important contributor to the tumorigenicity of GBM cells. TRAF4 regulated CAV1 stability by preventing ZNRF1-mediated ubiquitination and facilitating USP7-mediated deubiquitination independently of its E3 ubiquitin ligase catalytic activity. TRAF4-mediated stabilization of CAV1 activated protumorigenic AKT/ERK1/2 signaling, and disruption of this axis resulted in defects in stemness maintenance. In addition, expression of TRAF4 and CAV1 was positively correlated and predicted poor prognosis in human GBM samples. Screening of common nervous system drugs identified Risperidone interaction with TRAF4, and Risperidone treatment resulted in the dissociation of TRAF4 and CAV1. Importantly, pharmacological inhibition of TRAF4 with Risperidone potently inhibited self-renewal, abrogated tumorigenicity, and reversed TMZ resistance in GBM. Overall, TRAF4-mediated stabilization of CAV1 promotes stemness and TMZ resistance in GBM, providing a therapeutic strategy that could improve patient outcomes.