Cancer stem cells (CSCs), progenitor tumor cells with stemness characteristics, play key roles in cancer's onset, progression, metastasis, relapse, and chemotherapy resistance. While the exact molecular mechanisms of CSC development are not fully understood, recent research has revealed regulatory pathways of their generation with the weighty involvement of non-coding RNAs. It has been found that some pseudogenes are transcribed to long non-coding RNAs (lncRNAs), which are functionally and structurally similar to typical lncRNAs with biological functions including sponge miRNAs, antisense RNA, and interactions with proteins. Outstandingly, various in vitro and in vivo evidence have demonstrated that dysregulation of pseudogene-derived lncRNAs is directly involved in the development of CSCs in different cancers, mainly through functioning as miRNA sponges for modulating CSC-related signaling pathways. Therefore, researchers have suggested that research in this field can reveal hidden aspects of CSC development and can also open a new window for developing novel cancer therapeutic and diagnostic targets. In this review, we comprehensively address the recent findings of previous studies on the dysregulated roles of pseudogene-derived lncRNAs in directing and generating CSCs in various cancers. Also, their clinical capacities in terms of biomarkers, diagnosis, and treatment for cancer will be discussed.