The Polycomb group protein enhancer of zeste homolog 2 (EZH2), which has roles during development of numerous tissues, is a critical regulator of cell type identity. Overexpression of EZH2 has been detected in invasive breast carcinoma tissue samples and is observed in human breast tissue samples of morphologically normal lobules up to 12 years before the development of breast cancer. The function of EZH2 during preneoplastic progression in the mammary gland is unknown. To investigate the role of EZH2 in the mammary gland, we targeted the expression of EZH2 to mammary epithelial cells using the mouse mammary tumor virus long terminal repeat. EZH2 overexpression resulted in aberrant terminal end bud architecture. By the age of 4 months, 100% of female mouse mammary tumor virus-EZH2 virgin mice developed intraductal epithelial hyperplasia resembling the human counterpart accompanied by premature differentiation of ductal epithelial cells and up-regulation of the luminal marker GATA-3. In addition, remodeling of the mammary gland after parturition was impaired and EZH2 overexpression caused delayed involution. Mechanistically, we found that EZH2 physically interacts with beta-catenin, inducing beta-catenin nuclear accumulation in mammary epithelial cells and activating Wnt/beta-catenin signaling. The biological significance of these data to human hyperplasias is demonstrated by EZH2 up-regulation and colocalization with beta-catenin in human intraductal epithelial hyperplasia, the earliest histologically identifiable precursor of breast carcinoma.