The cancer stem cell hypothesis suggests that tumors are initiated and maintained by cancer stem cells capable of self-renewal and differentiation into mature tumor cells. Recent studies have demonstrated the existence of cancer initiating cells in different solid tumors. In this study, we identified a subpopulation of CD44+ cells within the tumor of gastric cancer patients, which, upon treatment by chemotherapeutic agent 5-fluorouracil (5-FU), were markedly enriched. In vitro culture of isolated CD44+ subpopulation from gastric tumors by magnetic beads sorting led to formation of gastric spheroid colonies. These colonies retained CD44+ surface marker expression during culture, and were undifferentiated in nature. Subcutaneous injections of CD44+ gastric cancer cells conferred tumorigenicity in SCID mice. Moreover, implantation of CD44+ cells from these established tumors remained tumorigenic in successive passages. Using CD44+ cells isolated from the gastric cell lines AGS and SGC7901, similar results were obtained. Upon enrichment by 5-FU, CD44+ cells harbored increased ALDH expression as compared with CD44- cells. Our results demonstrated for the first time the existence of CD44+ cells within the tumors of gastric cancer patients that are endowed with stem cells properties, and also provide a plausible explanation for chemo-resistance frequently observed in gastric cancer patients. Such findings provide a basis for further studies on targeting this tumorigenic subpopulation for better treatment of gastric cancer patients.