Tumor cell plasticity contributes to functional and morphological heterogeneity. To uncover the underlying mechanisms of this plasticity, we examined glioma stem-like cells (GSC) where we found that the biological interconversion between GSCs and differentiated non-GSCs is functionally plastic and accompanied by gain or loss of PRC2, a complex that modifies chromatin structure. PRC2 mediates lysine 27 trimethylation on histone H3 and in GSC it affected pluripotency or development associated genes (e.g. Nanog, Wnt1, BMP5) together with alterations in the subcellular localization of EZH2, a catalytic component of PRC2. Intriguingly, exogenous expression of EZH2-dNLS, which lacks nuclear localization sequence, impaired the repression of Nanog expression under differentiation conditions. RNAi-mediated attenuation or pharmacological inhibition of EZH2 had little to no effect on apoptosis or BrdU incorporation in GSCs, but it disrupted morphological interconversion and impaired GSC integration into the brain tissue, thereby improving survival of GSC-bearing mice. Pathological analysis of human glioma specimens revealed that the number of tumor cells with nuclear EZH2 is larger around tumor vessels and the invasive front, suggesting that nuclear EZH2 may help reprogram tumor cells in close proximity to this microenvironment. Our results indicate that epigenetic regulation by PRC2 is a key mediator of tumor cell plasticity, which is required for the adaptation of glioblastoma cells to their microenvironment. Thus, PRC2-targeted therapy may reduce tumor cell plasticity and tumor heterogeneity, offering a new paradigm for glioma treatment.