Glioblastoma (GBM) is a complex ecosystem that includes a heterogeneous tumor population and the tumor immune microenvironment (TIME), prominently containing tumor-associated macrophages (TAMs) and microglia. Here, we demonstrated that β2-microglobulin (B2M), a subunit of the class I major histocompatibility complex (MHC-I), promotes maintenance of stem-like neoplastic populations and reprograms the TIME to an anti-inflammatory, tumor-promoting state. B2M activated PI3K/AKT/mTOR signaling by interacting with PIP5K1A in GBM stem cells (GSCs) and promoting MYC-induced secretion of transforming growth factor-β1 (TGF-β1). Inhibition of B2M attenuated GSC survival, self-renewal, and tumor growth. B2M-induced TGF-β1 secretion activated paracrine SMAD and PI3K/AKT signaling in TAMs and promoted an M2-like macrophage phenotype. These findings reveal tumor promoting functions of B2M and suggest that targeting B2M or its downstream axis may provide an effective approach for treating GBM.