Germline mutations in Brca1 are responsible for most cases of familial breast and ovarian cancers, but somatic mutations in the gene are rarely detected in sporadic tumors. Moreover, mouse embryos carrying Brca1-null mutations or homozygous deletions of Brca1 exon 11 of (Brca1Delta11/Delta11) die during gestation due to proliferation defects, raising questions about the mechanisms by which Brca1 represses tumor formation. Molecular analysis reveals that these Brca1 mutations cause hypersensitivity to gamma-irradiation and chromosomal abnormalities in embryos and embryonic fibroblast cells (MEFs). Notably, Brca1Delta11/Delta11 MEFs maintain an intact G1-S checkpoint, but are defective in G2-M checkpoint control. They also contain multiple, functional centrosomes, which lead to unequal chromosome segregation and aneuploidy. These data uncover an essential role for Brca1 in maintaining genetic stability through regulation of centrosome duplication and G2-M checkpoint, and provide a molecular basis for its role in tumorigenesis. Finally, we show that conditional mutation of Brca1 in mammary epithelium causes increased apoptosis and abnormal ductal development. Mammary tumor formation in mutant mice occurs after long latency and is associated with p53 mutations. These results are consistent with a model that Brca1 acts as a caretaker gene, whose absence does not directly initiate tumorigenesis, instead, causes genetic instability, which triggers further alterations and ultimately leads to tumor formation.