Whether the human tumor virus, Epstein-Barr Virus (EBV), promotes breast cancer remains controversial and a potential mechanism has remained elusive. Here we show that EBV can infect primary mammary epithelial cells (MECs) that express the receptor CD21. EBV infection leads to the expansion of early MEC progenitor cells with a stem cell phenotype, activates MET signaling and enforces a differentiation block. When MECs were implanted as xenografts, EBV infection cooperated with activated Ras and accelerated the formation of breast cancer. Infection in EBV-related tumors was of a latency type II pattern, similar to nasopharyngeal carcinoma (NPC). A human gene expression signature for MECs infected with EBV, termed EBVness, was associated with high grade, estrogen-receptor-negative status, p53 mutation and poor survival. In 11/33 EBVness-positive tumors, EBV-DNA was detected by fluorescent in situ hybridization for the viral LMP1 and BXLF2 genes. In an analysis of the TCGA breast cancer data EBVness correlated with the presence of the APOBEC mutational signature. We conclude that a contribution of EBV to breast cancer etiology is plausible, through a mechanism in which EBV infection predisposes mammary epithelial cells to malignant transformation, but is no longer required once malignant transformation has occurred.