Lung cancer remains one of the leading causes of cancer-related deaths worldwide with a 5-year survival rate of less than 20%. One approach to improving survival is the identification of biomarkers to detect early stage disease. In this study, we investigated the potential of the stem cell and progenitor cell marker, Musashi1 (Msi1), as a diagnostic marker and potential therapeutic target for lung cancer. Functional studies in A549 bronchioalveolar carcinoma and NCI-H520 squamous cell carcinoma cells revealed that Msi1 was enriched in spheroid cultures of tumor cells and in the CD133+ cell population. Downregulation of Msi1 by lentivirus-mediated expression of an Msi1 shRNA reduced spheroid colony proliferation. Growth inhibition was associated with reduced nuclear localization of β-catenin and inhibition of the processing of intracellular Notch. In primary lung cancer, Msi1 protein expression was elevated in 86% of 202 tissue microarray specimens, and Msi1 mRNA was increased in 80% of 118 bronchoscopic biopsies, including metastatic disease, but was rarely detected in adjacent normal lung tissue and in non-malignant diseased tissue. Msi1 was expressed in a diffuse pattern in most tumor subtypes, except in squamous cell carcinomas, where it appeared in a focal pattern in 50% of specimens. Thus, Msi1 is a sensitive and specific diagnostic marker for all lung cancer subtypes.