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Adenoid cystic carcinoma (ACC) and basal cell adenoma (BCA) share many histological characteristics and often need a differential diagnosis in clinical pathology. Recently, we found homeobox protein engrailed-1 (EN1) was a potential diagnostic marker for ACC in an organoids library of salivary gland tumors (SGTs). Here we aim to confirm EN1 as a differential diagnostic marker for ACC, and further investigate the regulatory mechanism and biological function of EN1 in tumor progression. The transcriptional analysis, quantitative polymerase chain reaction, Western blot and immunohistochemistry staining were performed and revealed that EN1 was specifically and highly expressed in ACC, and accurately differentiated ACC from BCA. Furthermore, TGFβ signaling pathway was found associated with ACC, and the regulation of EN1 through TGFβ was detected in the human ACC cell lines and patient-derived organoids (PDOs). TGFβ-induced EN1 was important in promoting tumor budding in the PDOs model. Interestingly, a high level of EN1 and TGFβ1 in the budding tips was observed in ACC clinical samples, and the expression of EN1 and TGFβ1 in ACC was significantly associated with the clinical stage. In summary, our study verified EN1 is a good diagnostic marker to differentiate ACC from BCA. TGFβ-induced EN1 facilitates the tumor budding of ACC, which might be an important mechanism related to the malignant phenotype of ACC.