The mechanisms controlling tumour-induced angiogenesis are presently not clear. In principle, angiogenesis can be achieved through the activation of endothelial cells in existing vessels or by transdifferentiation of tumour cells into endothelial cells. However, whether tumour cells can go through a prior epithelial-mesenchymal transition and further differentiate into endothelial cells remains unknown. Here we show that overexpression of Twist1, a transcriptional regulator that induces and promotes cancer metastasis, leads to endothelial differentiation in head and neck cancer (HNC) cells. Induction of Jagged1 expression by Twist1 is essential for Twist1-induced endothelial differentiation. The Jagged1/Notch signalling subsequently activates KLF4, inducing stem-like properties in HNC cells and conferring them with drug resistance. Our results indicate that the Twist1-Jagged1/KLF4 axis is essential both for transdifferentiation of tumour cells into endothelial cells and for chemoresistance acquisition.