Transglutaminase 2 (TG2) is a multifunctional protein that promotes or suppresses tumorigenesis, depending on intracellular location and conformational structure. Acyclic retinoid (ACR) is an orally administered vitamin A derivative that prevents hepatocellular carcinoma (HCC) recurrence by targeting liver cancer stem cells (CSCs). In this study, we examined the subcellular location-dependent effects of ACR on TG2 activity at a structural level and characterized the functional role of TG2 and its downstream molecular mechanism in the selective depletion of liver CSCs. A binding assay with high-performance magnetic nanobeads and structural dynamic analysis with native gel electrophoresis and size-exclusion chromatography-coupled multi-angle light scattering or small-angle X-ray scattering showed that ACR binds directly to TG2, induces oligomer formation of TG2, and inhibits the transamidase activity of cytoplasmic TG2 in HCC cells. The loss-of-function of TG2 suppressed the expression of stemness-related genes, spheroid proliferation and selectively induced cell death in an EpCAM+ liver CSC subpopulation in HCC cells. Proteome analysis revealed that TG2 inhibition suppressed the gene and protein expression of exostosin glycosyltransferase 1 (EXT1) and heparan sulfate biosynthesis in HCC cells. In contrast, high levels of ACR increased intracellular Ca2+concentrations along with an increase in apoptotic cells, which probably contributed to the enhanced transamidase activity of nuclear TG2. This study demonstrates that ACR could act as a novel TG2 inhibitor; TG2-mediated EXT1 signaling is a promising therapeutic target in the prevention of HCC by disrupting liver CSCs.