Basal-like breast cancer (BBC) is a subtype of breast cancer with poor prognosis. Inherited mutations of BRCA1, a cancer susceptibility gene involved in double-strand DNA break (DSB) repair, lead to breast cancers that are nearly always of the BBC subtype; however, the precise molecular lesions and oncogenic consequences of BRCA1 dysfunction are poorly understood. Here we show that heterozygous inactivation of the tumor suppressor gene Pten leads to the formation of basal-like mammary tumors in mice, and that loss of PTEN expression is significantly associated with the BBC subtype in human sporadic and BRCA1-associated hereditary breast cancers. In addition, we identify frequent gross PTEN mutations, involving intragenic chromosome breaks, inversions, deletions and micro copy number aberrations, specifically in BRCA1-deficient tumors. These data provide an example of a specific and recurrent oncogenic consequence of BRCA1-dependent dysfunction in DNA repair and provide insight into the pathogenesis of BBC with therapeutic implications. These findings also argue that obtaining an accurate census of genes mutated in cancer will require a systematic examination for gross gene rearrangements, particularly in tumors with deficient DSB repair.