The unfolded protein response (UPR) is an adaptive mechanism that regulates protein and cellular homeostasis. Three endoplasmic reticulum (ER) membrane localized stress sensors, IRE1, PERK and ATF6, coordinate the UPR in order to maintain ER proteostasis and cell survival, or induce cell death when homeostasis cannot be restored. However, recent studies have identified alternative functions for the UPR in developmental biology processes and cell fate decisions under both normal and cancerous conditions. In cancer, increasing evidence points towards the involvement of the three UPR sensors in oncogenic reprogramming and the regulation of tumor cells endowed with stem cell properties, named cancer stem cells (CSCs), that are considered to be the most malignant cells in tumors. Here we review the reported roles and underlying molecular mechanisms of the three UPR sensors in regulating stemness and differentiation, particularly in solid tumor cells, processes that have a major impact on tumor aggressiveness. Mainly PERK and IRE1 branches of the UPR were found to regulate CSCs and tumor development and examples are provided for breast cancer, colon cancer and aggressive brain tumors, glioblastoma. Although the underlying mechanisms and interactions between the different UPR branches in regulating stemness in cancer need to be further elucidated, we propose that PERK and IRE1 targeted therapy could inhibit self-renewal of CSCs or induce differentiation that is predicted to have therapeutic benefit. For this, more specific UPR modulators need to be developed with favorable pharmacological properties that together with patient stratification will allow optimal evaluation in clinical studies.