BACKGROUND Cancer stem cells/initiating cells (CSC/CIC), are thought to exist as a small population in malignant tissues. They are resistant to conventional cancer treatments and possibly underlie post-treatment relapse. The CIC population can be targeted with capsid modified oncolytic adenoviruses. RESULTS We studied the mechanisms of innate immunity to oncolytic adenovirus Ad5/3-Delta24 in conventional treatment resistant non-CIC breast cancer cells, breast cancer CD44(+)/CD24(-/low) CIC population and normal breast tissue CD44(+)/CD24(-/low) stem cells. We compared virus recognition by pattern recognition receptors for adenovirus, Toll-like receptors (TLR) 2 and 9 and virus induced type I interferon (IFN) response regulation in these cell types. We show TLR mediated virus recognition in these non-immune cell types. Normal tissue stem cells have intact type I IFN signaling. Furthermore, TLR9 and TLR2 reside constantly in recognition sites, implying constant activation. In contrast, breast cancer CD44(+)/CD24(-/low) CIC have dysregulated innate immune responses featuring dysfunctional virus recognition caused by impaired trafficking of TLR9 and cofactor MyD88 and the absence of TLR2, having a deleterious impact on TLR pattern recognition receptor signaling. Furthermore, the CIC have increased inhibitory signaling via the suppressor of cytokine signaling/Tyro3/Axl/Mer receptor tyrosine kinase (SOCS/TAM) pathway. These defects in contribute to dysfunctional induction of type I IFN response in CIC and therefore permissivity to oncolytic adenovirus. CONCLUSIONS CICs may underlie the incurable nature of relapsed or metastatic cancers and are therefore an important target regarding diagnostic and prognostic aspects as well as treatment of the disease. This study addresses the mechanisms of innate infection immunity in stem cells deepening the understanding of stem cell biology and may benefit not only virotherapy but also immunotherapy in general.