Targeting tumour-initiating cells (TICs) would lead to new therapies to cure cancer. We previously demonstrated that TICs have the capacity to survive under suspension conditions, while other cells undergo anoikis. Here we show that TICs exhibit increased phosphorylation levels of S727STAT3 because of PP2A inactivation. Collagen 17 gene expression is upregulated in a STAT3-dependent manner, which also stabilizes laminin 5 and engages cells to form hemidesmosome-like junctions in response. Blocking the PP2A-S727STAT3-collagen 17 pathway inhibits the suspension survival of TICs and their ability to form tumours in mice, while activation of the same pathway increases the suspension survival and tumour-initiation capacities of bulk cancer cells. The S727STAT3 phosphorylation levels correlate with collagen 17 expression in colon tumour samples, and correlate inversely with survival. Finally, this signalling axis enhances the ability of TIC to form tumours in mouse models of malignant lung cancer pleural effusion and spontaneous colon cancer metastasis.