Multidrug resistance and disease relapse is a challenging clinical problem in the treatment of breast cancer. In this study, we investigated the hyaluronan (HA)-induced interaction between CD44 (a primary HA receptor) and protein kinase Cepsilon (PKCepsilon), which regulates a number of human breast tumor cell functions. Our results indicate that HA binding to CD44 promotes PKCepsilon activation, which, in turn, increases the phosphorylation of the stem cell marker, Nanog, in the breast tumor cell line MCF-7. Phosphorylated Nanog is then translocated from the cytosol to the nucleus and becomes associated with RNase III DROSHA and the RNA helicase p68. This process leads to microRNA-21 (miR-21) production and a tumor suppressor protein (e.g. PDCD4 (program cell death 4)) reduction. All of these events contribute to up-regulation of inhibitors of apoptosis proteins (IAPs) and MDR1 (multidrug-resistant protein), resulting in anti-apoptosis and chemotherapy resistance. Transfection of MCF-7 cells with PKCepsilon or Nanog-specific small interfering RNAs effectively blocks HA-mediated PKCepsilon-Nanog signaling events, abrogates miR-21 production, and increases PDCD4 expression/eIF4A binding. Subsequently, this PKCepsilon-Nanog signaling inhibition causes IAP/MDR1 down-regulation, apoptosis, and chemosensitivity. To further evaluate the role of miR-21 in oncogenesis and chemoresistance, MCF-7 cells were also transfected with a specific anti-miR-21 inhibitor in order to silence miR-21 expression and inhibit its target functions. Our results indicate that anti-miR-21 inhibitor not only enhances PDCD4 expression/eIF4A binding but also blocks HA-CD44-mediated tumor cell behaviors. Thus, this newly discovered HA-CD44 signaling pathway should provide important drug targets for sensitizing tumor cell apoptosis and overcoming chemotherapy resistance in breast cancer cells.