Cancer stem cells are key drivers of tumor progression and disease recurrence in multiple myeloma (MM). However, little is known about the regulation of MM stem cells. Here, we show that a population of MM cells, known as the side population (SP), exhibits stem-like properties. Cells that constitute the SP in primary MM isolates are negative or seldom expressed for CD138 and CD20 markers. In addition, the SP population contains stem cells that belong to the same lineage as the mature neoplastic plasma cells. Importantly, our data indicate that the SP and nonside population (NSP) percentages in heterogeneous MM cells are balanced, and that this balance can be achieved through a prolonged in vitro culture. Furthermore, we show that SP cells, with confirmed molecular characteristics of MM stem cells, can be regenerated from purified NSP cell populations. We also show that the percentage of SP cells can be enhanced by the hypoxic stress, which is frequently observed within MM tumors. Finally, hypoxic stress enhanced the expression of transforming growth factor 1 (TGF-1) and blocking the TGF-1 signaling pathway inhibited the NSP dedifferentiation. Taken together, these findings indicate that the balance between MM SP and NSP is regulated by environmental factors and TGF-1 pathway is involved in hypoxia-induced increase of SP population. Understanding the mechanisms that facilitate SP maintenance will accelerate the design of novel therapeutics aimed at controlling these cells in MM. What's new? Multiple myeloma remains incurable, with patients prone to relapse and progression despite therapy. The resiliency of multiple myeloma may be linked to the existence of side population (SP) cells, which possess stem-like qualities. Here, SP and non-SP (NSP) cell percentages were found to exist in balance in multiple myeloma, with NSP populations serving as reservoirs for the generation of SP cells. Hypoxic stress enhanced the percentage of SP cells as well as TGF-1 expression. The findings suggest that environmental factors and the TGF-1 pathway are involved in the regulation of SP-NSP balance in multiple myeloma.