The ability to transplant mammary cancer stem cells, identified by the phenotype CD24(+)CD29(+)CD49f(+)Sca-1(low), is dependent on the microenvironment in which the cells are placed. Using the MMTV-PyMT mouse model of mammary cancer, we now report two methods of tumor growth enhancement: contributions of tumor stroma in the form of tumor-derived mesenchymal stem cells and orthotopic vs. heterotopic transplantation sites. To support evidence of stem cell function, tumor-derived mesenchymal stem cells differentiated into adipocyte- and osteocyte-like cells after culture in specific medium. Co-injection of tumor-initiating cells with tumor-derived mesenchymal stem cells significantly increased tumor initiation compared to subcutaneous injection of TICs alone; co-injection also allowed tumor initiation with a single TIC. Interestingly, we observed the formation of sarcomas after co-injections of tumor-derived mesenchymal stem cells or mouse embryonic fibroblasts with TICs; sarcomas are not observed in spontaneous MMTV-PyMT tumors and rarely observed in injections of TICs alone. Tumor initiation was also significantly increased in the orthotopic injection site compared to heterotopic injections. We conclude that tumor stroma and orthotopic sites both enhance tumor initiation by mammary cancer stem cells.