Our previous studies have shown that the novel oncogene, cancer upregulated gene 2 (CUG2), activates STAT1, which is linked to anticancer drug resistance, induces epithelial‑mesenchymal transition (EMT) and cancer stem cell‑like phenotypes as determined by MTT, migration and sphere formation assays. We thus aimed to ascertain whether the activation of STAT1 by CUG2 is involved in these malignant phenotypes besides drug resistance. Here, we showed that STAT1 suppression decreased the expression of N‑cadherin and vimentin, biomarkers of EMT, which led to inhibition of the migration and invasion of human lung A549 cancer cells stably expressing CUG2, but did not recover E‑cadherin expression. STAT1 siRNA also diminished CUG2‑induced TGF‑β signaling, which is critical in EMT, and TGF‑β transcriptional activity. Conversely, inhibition of TGF‑β signaling reduced phosphorylation of STAT1, indicating a crosstalk between STAT1 and TGF‑β signaling. Furthermore, STAT1 silencing diminished sphere formation, which was supported by downregulation of stemness‑related factors such as Sox2, Oct4, and Nanog. Constitutive suppression of STAT1 also inhibited cell migration, invasion and sphere formation. As STAT1 acetylation counteracts STAT1 phosphorylation, acetylation of STAT1 by treatment with trichostatin A, an inhibitor of histone deacetylases (HDACs), reduced cell migration, invasion, and sphere formation. As HDAC4 is known to target STAT1, its role was investigated under CUG2 overexpression. HDAC4 suppression resulted in inhibition of cell migration, invasion, and sphere formation as HDAC4 silencing hindered TGF‑β signaling and decreased expression of Sox2 and Nanog. Taken together, we suggest that STAT1‑HDAC4 signaling induces malignant tumor features such as EMT and sphere formation in CUG2‑overexpressing cancer cells.