Breast cancer (BC) is a disease with diverse tumor heterogeneity, which challenges conventional approaches to develop biomarkers for early detection and prognosis. To identify effective biomarkers, we performed a genome-wide screen for functional methylation changes in BC, i.e., genes silenced by promoter hypermethylation, using a functionally proven gene expression approach. A subset of candidate hypermethylated genes were validated in primary BCs and tested as markers for detection and prognosis prediction of BC. We identified 33 cancer specific methylated genes and, among these, two categories of genes: (1) highly frequent methylated genes that detect early stages of BC. Within that category, we have identified the combination of NDRG2 and HOXD1 as the most sensitive (94%) and specific (90%) gene combination for detection of BC; (2) genes that show stage dependent methylation frequency pattern, which are candidates to help delineate BC prognostic signatures. For this category, we found that methylation of CDO1, CKM, CRIP1, KL and TAC1 correlated with clinical prognostic variables and was a significant prognosticator for poor overall survival in BC patients. CKM [Hazard ratio (HR) = 2.68] and TAC1 (HR = 7.73) were the strongest single markers and the combination of both (TAC1 and CKM) was associated with poor overall survival independent of age and stage in our training (HR = 1.92) and validation cohort (HR = 2.87). Our study demonstrates an efficient method to utilize functional methylation changes in BC for the development of effective biomarkers for detection and prognosis prediction of BC.