It remains unclear whether PAX6 acts as a crucial transcription factor for lung cancer stem cell (CSC) traits. We demonstrate that PAX6 acts as an oncogene responsible for induction of cancer stemness properties in lung adenocarcinoma (LUAD). Mechanistically, PAX6 promotes GLI transcription, resulting in SOX2 upregulation directly by the binding of GLI to the proximal promoter region of the SOX2 gene. The overexpressed SOX2 enhances the expression of key pluripotent factors (OCT4 and NANOG) and suppresses differentiation lineage factors (HOPX and NKX2-1), driving cancer cells toward a stem-like state. In contrast, in the differentiated non-CSCs, PAX6 is transcriptionally silenced by its promoter methylation. In human lung cancer tissues, the positive linear correlations of PAX6 expression with GLI and SOX2 expression and its negative correlations with HOPX and NKX2-1 expression were observed. Therapeutically, the blockade of the PAX6-GLI-SOX2 signaling axis elicits a long-lasting therapeutic efficacy by limiting CSC expansion following chemotherapy. Furthermore, a methylation panel including the PAX6 gene yielded a sensitivity of 79.1% and specificity of 83.3% for cancer detection using serum DNA from stage IA LUAD. Our findings provide a rationale for targeting the PAX6-GLI-SOX2 signaling axis with chemotherapy as an effective therapeutic strategy and support the clinical utility of PAX6 gene promoter methylation as a biomarker for early lung cancer detection.