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It has been proposed that a subpopulation of tumour cells with stem cell-like characteristics, known as cancer stem cells (CSCs), drives tumour initiation and generates tumour heterogeneity, thus leading to cancer metastasis, recurrence, and drug resistance. Although there has been substantial progress in CSC research into many solid tumour types, an understanding of the biology of CSCs in lung cancer remains elusive, mainly because of their heterogeneous origins and high plasticity. Here, we demonstrate that engineered lung cancer cells derived from normal human airway basal epithelial cells possessed CSC-like characteristics in terms of multilineage differentiation potential and strong tumour-initiating ability. Moreover, we established an in vitro 3D culture system that allowed the in vivo differentiation process of the CSC-like cells to be recapitulated. This engineered CSC model provides valuable opportunities for studying the biology of CSCs and for exploring and evaluating novel therapeutic approaches and targets in lung CSCs.