Despite the remarkable success of immune checkpoint blockade (ICB) therapy, most cancer patients still do not respond. We now find that immunotherapy can induce stem-like properties in tumors. Using mouse models of breast cancer, we observe that cancer stem cells (CSCs) show not only enhanced resistance to T cell cytotoxicity, but that interferon gamma (IFNγ) produced by activated T cells directly converts non-CSCs to CSCs. IFNγ enhances several CSC phenotypes, such as resistance to chemo- and radiotherapy and metastasis formation. We identified the branched-chain amino acid aminotransaminase 1 (BCAT1) as a downstream mediator of IFNγ-induced CSC plasticity. Targeting BCAT1 in vivo improved cancer vaccination and ICB therapy by preventing IFNγ-induced metastasis formation. Breast cancer patients treated with ICB exhibited a similar increase in CSC markers expression indicating comparable responses to immune activation in humans. Collectively, we discover an unexpected, pro-tumoral role for IFNγ that may contribute to cancer immunotherapy failure.