CD271 (p75 neurotrophin receptor) plays both positive and negative roles in cancer development, depending on the cell type. We previously reported that CD271 is a marker for tumor initiation and is correlated with a poor prognosis in human hypopharyngeal cancer (HPC). To clarify the role of CD271 in HPC, we established HPC cell lines and knocked down the CD271 expression using siRNA. We found that CD271-knockdown completely suppressed the cells' tumor-forming capability both in vivo and in vitro. CD271-knockdown also induced cell-cycle arrest in G0 and suppressed ERK phosphorylation. While treatment with an ERK inhibitor only partially inhibited cell growth, CDKN1C, which is required for maintenance of quiescence, was strongly upregulated in CD271-depleted HPC cells, and the double knockdown of CD271 and CDKN1C partially rescued the cells from G0 arrest. In addition, either CD271 depletion or the inhibition of CD271-RhoA signaling by TAT-Pep5 diminished the in vitro migration capability of the HPC cells. Collectively, CD271 initiates tumor formation by increasing the cell proliferation capacity through CDKN1C suppression and ERK-signaling activation, and by accelerating the migration signaling pathway in HPC.