Colorectal cancer (CRC) is the third most common malignancy and the second leading cause of cancer-related deaths in America. Nearly two thirds of newly diagnosed CRC cases include lymph node (LN) involvement, and LN metastasis is one of the strongest negative prognostic factors for CRC. It is thought that CRC tumors contain a small population of drug-resistant CRC tumor-initiating cells (Co-TICs) that may be responsible for cancer recurrence. To evaluate the effects of the LN stromal cells on Co-TICs, we established a unique xenoplant model using CRC cells isolated by enzymatic digestion from consented patient specimens, HT-29 cells, HCA-7 cells, and LN stromal cell line HK cells. We found that HK cells and HK cell-conditioned media enhanced CRC tumor formation and tumor angiogenesis. Cells expressing CD133(+) and the stromal cell-derived factor 1α (SDF-1α) receptor CXCR4 were enriched in chemotherapeutic-resistant CRC cells. CD133(+)CXCR4(+) Co-TICs isolated from patient specimens are more tumorigenic than unsorted tumor cells. Furthermore, the inhibitors specific to HK cell-derived SDF-1α reduced tumor formation and tumor angiogenesis. Our results have demonstrated a role for Co-TICs in tumor growth and defined the influence of LN stromal cells on Co-TICs. We have identified a major Co-TIC/LN microenvironment-specific mechanism for CRC resistance to chemotherapeutic agents and established experimental platforms for both in vitro and in vivo testing, indicating that SDF-1α and its receptor, CXCR4, may be targets for clinical therapy.