Regulation of the stemness factor, SOX2, by cytokine stimuli controls self-renewal and differentiation in cells. Activating mutations in EGFR are proven therapeutic targets for tyrosine kinase inhibitors (TKI) in lung adenocarcinoma, but acquired resistance to TKIs inevitably occurs. The mechanism by which stemness and differentiation signaling emerge in lung cancers to affect TKI tolerance and lung cancer dissemination has yet to be elucidated. Here, we report that cross-talk between SOX2 and TGFb signaling affects lung cancer cell plasticity and TKI tolerance. TKI treatment favored selection of lung cancer cells displaying mesenchymal morphology with deficient SOX2 expression, whereas SOX2 expression promoted TKI sensitivity and inhibited the mesenchymal phenotype. Preselection of EGFR-mutant lung cancer cells with the mesenchymal phenotype diminished SOX2 expression and TKI sensitivity, whereas SOX2 silencing induced vimentin, but suppressed BCL2L11, expression and promoted TKI tolerance. TGFb stimulation downregulated SOX2 and induced epithelial-to-mesenchymal transdifferentiation accompanied by increased TKI tolerance, which can interfere with ectopic SOX2 expression. SOX2-positive lung cancer cells exhibited a lower dissemination capacity than their SOX2-negative counterparts. Tumors expressing low SOX2 and high vimentin signature were associated with worse survival outcomes in patients with EGFR mutations. These findings provide insights into how cancer cell plasticity regulated by SOX2 and TGFb signaling affects EGFR-TKI tolerance and lung cancer dissemination.