Cripto-1 (CR-1) is involved in various processes in embryonic development and cancer. Multiple pathways regulate CR-1 expression. Our present work demonstrates a possible positive feedback circuit where CR-1 induces its own expression. Using U-87 MG cells treated with exogenous CR-1, we show that such induction involves ALK4/SMAD2/3 pathway. Stochasticity in gene expression gives rise to heterogeneity in expression in genetically identical cells. Positive feedback increases such heterogeneity and often gives rise to two subpopulations of cells, having higher and lower expression of a gene. Using flow cytometry, we show that U-87 MG cells have a minuscule subpopulation with detectable expression of CR-1. Induction of CR-1 expression, by exogenous CR-1, increases the size of this CR-1 positive subpopulation. However, even at very high dose, most of the cells remain CR-1 negative. We show that population behavior of CR-1 induction has a signature similar to bimodal expression expected in a transcriptional circuit with positive feedback. We further show that treatment of U-87 MG cells with CR-1 leads to higher expression of drug efflux protein MDR-1 in the CR-1 positive subpopulation, indicating correlated induction of these two proteins. Positive feedback driven heterogeneity in expression of CR-1 may play crucial role in phenotypic diversification of cancer cells.