Ras pathway mutation is frequent in carcinomas where it induces expression of the transcriptional repressor ZEB1. Although ZEB1 is classically linked to epithelial–mesenchymal transition and tumour metastasis, it has an emerging second role in generation of cancer-initiating cells. Here we show that Ras induction of ZEB1 is required for tumour initiation in a lung cancer model, and we link this function to repression Pten, whose loss is critical for emergence of cancer-initiating cells. These two roles for ZEB1 in tumour progression can be distinguished by their requirement for different levels of ZEB1. A lower threshold of ZEB1 is sufficient for cancer initiation, whereas further induction is necessary for tumour metastasis.