Human endogenous retroviruses (HERVs) are ancestral viral relics that constitute nearly 8% of the human genome. Although normally silenced, the most recently integrated provirus HERV-K (HML-2) can be reactivated in certain cancers. Here, we report pathological expression of HML-2 in malignant gliomas in both cerebrospinal fluid and tumor tissue that was associated with a cancer stem cell phenotype and poor outcomes. Using single-cell RNA-Seq, we identified glioblastoma cellular populations with elevated HML-2 transcripts in neural progenitor–like cells (NPC-like) that drive cellular plasticity. Using CRISPR interference, we demonstrate that HML-2 critically maintained glioblastoma stemness and tumorigenesis in both glioblastoma neurospheres and intracranial orthotopic murine models. Additionally, we demonstrate that HML-2 critically regulated embryonic stem cell programs in NPC-derived astroglia and altered their 3D cellular morphology by activating the nuclear transcription factor OCT4, which binds to an HML-2–specific long-terminal repeat (LTR5Hs). Moreover, we discovered that some glioblastoma cells formed immature retroviral virions, and inhibiting HML-2 expression with antiretroviral drugs reduced reverse transcriptase activity in the extracellular compartment, tumor viability, and pluripotency. Our results suggest that HML-2 fundamentally contributes to the glioblastoma stem cell niche. Because persistence of glioblastoma stem cells is considered responsible for treatment resistance and recurrence, HML-2 may serve as a unique therapeutic target.