In the complex tumor microenvironment, cancer stem cells (CSCs), a rare population of cells, are responsible for malignant tumor initiation, metastasis, drug resistance and recurrence. Controlling breast CSCs (BCSCs) using natural compounds is a novel potential therapeutic strategy for clinical cancer treatment. In this study, a mammosphere assay-guided isolation protocol including silica gel, a C18 column, gel filtration, and high-pressure liquid chromatography was used to isolate an inhibitory compound from Cynanchum auriculatum extracts. The isolated inhibitory compound was identified as caudatin. Caudatin inhibited breast cancer cell proliferation, mammosphere formation and tumor growth. Caudatin decreased the CD44⁺/CD24⁻ and aldehyde dehydrogenase⁺ cell proportions and the levels of c-Myc, Oct4, Sox2, and CD44. Caudatin induced ubiquitin (Ub)-dependent glucocorticoid receptor (GR) degradation and blocked subsequent Yes-associated protein (YAP) nuclear accumulation and target gene transcription signals in BCSCs. These results show that the GR/YAP signaling pathway regulates BCSC formation and that caudatin may be a potential chemopreventive agent that targets breast cancer cells and CSCs.