Germline mutations in the tumor suppressor genes BRCA1 and BRCA2 predispose individuals to breast and ovarian cancers. Progress in determining the function of BRCA1 and BRCA2 suggests that they are involved in two fundamental cellular processes: DNA damage repair and transcriptional regulation. We evaluate current knowledge of BRCA1 and BRCA2 functions to explain why mutations in BRCA1 and BRCA2 lead specifically to breast and ovarian cancer. The BRCA1 and BRCA2 genes contain unusually high densities of repetitive elements. These features of the BRCAs genomic regions contribute to chromosomal instability of these genes. We propose that somatic alterations of BRCA1 and BRCA2 are common and driven by rearrangements between repetitive elements. Inherited and somatic mutations occur in BRCA1 and BRCA2; virtually all somatic mutations are the result of large genomic rearrangements. What are the consequences of such large somatic mutations of BRCA1 and BRCA2 in women with or without inherited mutations? The breast and ovary are estrogen-responsive tissues. Beginning in puberty, the breast epithelium proliferates rapidly in response to fluctuating levels of estrogen. We present a genetic model outlining how BRCA-deficient cells may gain uncontrolled proliferation leading to tumor formation. Central to this model of BRCA-mediated tumorigenesis are estrogen-mediated proliferation of breast and ovarian epithelium and the distinctive genomic context of the BRCA genes.