ABSTRACT: Epithelial-mesenchymal transition (EMT) in carcinoma cells enhances malignant progression by promoting invasion and survival. EMT is induced by microenvironmental factors, including TGF-? and Wnt agonists, and by the E-box-binding transcription factors Twist, Snail, and ZEB. Grainyhead-like-2 (GRHL2), a member of the mammalian Grainyhead family of wound-healing regulatory transcription factors, suppresses EMT and restores sensitivity to anoikis by repressing ZEB1 expression and inhibiting TGF-? signaling. In this study, we elucidate the functional relationship between GRHL2 and ZEB1 in EMT/MET and tumor biology. At least three homeodomain proteins, Six1, LBX1, and HoxA5, transactivated the ZEB1 promoter, in the case of Six1, through direct protein-promoter interaction. GRHL2 altered the Six1-DNA complex, inhibiting this transactivation. Correspondingly, GRHL2 expression prevented tumor initiation in xenograft assays, sensitized breast cancer cells to paclitaxel, and suppressed the emergence of CD44(high)CD24(low) cells (defining the cancer stem cell phenotype in the cell type studied). GRHL2 was downregulated in recurrent mouse tumors that had evolved to an oncogene-independent, EMT-like state, supporting a role for GRHL2 downregulation in this phenotypic transition, modeling disease recurrence. The combination of TGF-? and Wnt activation repressed GRHL2 expression by direct interaction of ZEB1 with the GRHL2 promoter, inducing EMT. Together, our observations indicate that a reciprocal feedback loop between GRHL2 and ZEB1 controls epithelial versus mesenchymal phenotypes and EMT-driven tumor progression.