The enlarged distinct bulky-ball-like nucleolus matrix assembly is observed in most cancer stem cells (CSCs); however, the underlying mechanism is largely unknown. We show that matrix metalloproteinase-7 (MMP-7) shedding MUC-1 SEA domain releases MUC-1 C-ter, facilitating the nucleolus trafficking of p53 in gefitinib-resistant lung CSCs. The nucleolus colocalizations of p53, MUC-1 C-ter, MMP-7 and nucleolin were observed in the CD34 CXADR CD44v gefitinib-resistant EGFR CSC colonies. MUC-1 C-ter induced a unique porous bulky-ball-shaped, cagelike nucleolus that functions as a nucleus molecular "garage" for potent tumor suppressor, p53. Nucleolus could also facilitate the novel sub-nucleus compartment for proteolytic processing p53 by MMP-7 to generate a 35 kDa fragment. Moreover, we show that salinomycin, an anti-CSC agent, disrupts nucleolus by inducing nucleoplasm translocation of p53 and sensitizing CSC to chemotherapy drugs. Thus, this study highlights the MMP-7-MUC-1-p53 axis in nucleolus as a potential therapeutic target for anti-CSCs to resolve the chemotherapy-resistance dilemma.