The lung cancer stem cell (LuCSC) model comprises an attractive framework to explore acquired drug resistance in non-small cell lung cancer (NSCLC) treatment. Here, we used NSCLC cell line model to translate cellular heterogeneity into tractable populations to understand the origin of lung cancers and drug resistance. The epithelial LuCSCs, presumably arising from alveolar bipotent stem/progenitor cells, were lineage naïve, noninvasive, and prone to creating aggressive progeny expressing AT2/AT1 markers. LuCSC-holoclones were able to initiate rimmed niches, where their specialization created pseudo-alveoli structures. Mechanistically, LuCSC transitioning from self-renewal (β-catenin and Nanog signaling) to malignant lineage differentiation is regulated by EGFR activation and the inverse inhibition of tumor suppressor MIG6. We further identified the functional roles of endogenous EGFR signaling in mediating progeny invasiveness and their ligands in LuCSC differentiation. Importantly, drug screening demonstrated that EGFR driving progeny were strongly responsive to TKIs; however, the LuCSCs were exclusively resistant but sensitive to AMPK agonist Metformin, antibiotic Salinomycin and to a lesser degree Carboplatin. Our data reveals previously an unknown mechanism of NSCLC resistance to EGFR-TKIs, which is associated with LuCSCs bearing a silenced EGFR and inversely expressed MIG6 suppressor gene. Taken altogether, successful NSCLC treatment requires development of a novel combination of drugs, efficiently targeting both LuCSCs and heterogeneous progeny.Keywords:EGFR/MIG6; NSCLC; cancer stem cells; drug resistance; niches.