PALB2 interacts with BRCA2, and biallelic mutations in PALB2 (also known as FANCN), similar to biallelic BRCA2 mutations, cause Fanconi anemia. We identified monoallelic truncating PALB2 mutations in 10/923 individuals with familial breast cancer compared with 0/1,084 controls (P = 0.0004) and show that such mutations confer a 2.3-fold higher risk of breast cancer (95% confidence interval (c.i.) = 1.4-3.9, P = 0.0025). The results show that PALB2 is a breast cancer susceptibility gene and further demonstrate the close relationship of the Fanconi anemia-DNA repair pathway and breast cancer predisposition.