Pancreatic stellate cells (PSCs) secrete high levels of transforming growth factor-β1 (TGF-β1) that contributes to the development of pancreatic ductal adenocarcinoma (PDAC). TGF-β1 modulates the expression of L1 cell adhesion molecule (L1CAM), but its role in tumour progression still remains controversial. To clarify L1 function in PDAC and cellular phenotypes, we performed L1CAM cell sorting, silencing and overexpression in several primary pancreatic cancer cells. PSCs silenced for TGF-β1 were used for crosstalk experiments. We found that TGF-β1 secreted by PSCs negatively regulates L1CAM expression, through canonical TGF-β-Smad2/3 signalling, leading to a more aggressive PDAC phenotype. Cells with reduced expression of L1CAM harboured enhanced stemness potential and tumourigenicity. Inactivation of TGF-β1 signalling in PSCs strongly reduced the aggressiveness of PDAC cells. Our data provide functional proof and mechanistic insights for the tumour-suppressive function of L1CAM via reducing stemness. Rescuing L1CAM expression in cancer cells through targeting of TGF-β1 reverses stemness and bears the potential to improve the still miserable prognosis of PDAC patients.