The adult mouse mammary epithelium contains self-sustained cell lineages that form the inner luminal and outer basal cell layers, with stem and progenitor cells contributing to its proliferative and regenerative potential. A key issue in breast cancer biology is the effect of genomic lesions in specific mammary cell lineages on tumour heterogeneity and progression. The impact of transforming events on fate conversion in cancer cells of origin and thus their contribution to tumour heterogeneity remains largely elusive. Using in situ genetic lineage tracing and limiting dilution transplantation, we have unravelled the potential of PIK3CA(H1047R), one of the most frequent mutations occurring in human breast cancer, to induce multipotency during tumorigenesis in the mammary gland. Here we show that expression of PIK3CA(H1047R) in lineage-committed basal Lgr5-positive and luminal keratin-8-positive cells of the adult mouse mammary gland evokes cell dedifferentiation into a multipotent stem-like state, suggesting this to be a mechanism involved in the formation of heterogeneous, multi-lineage mammary tumours. Moreover, we show that the tumour cell of origin influences the frequency of malignant mammary tumours. Our results define a key effect of PIK3CA(H1047R) on mammary cell fate in the pre-neoplastic mammary gland and show that the cell of origin of PIK3CA(H1047R) tumours dictates their malignancy, thus revealing a mechanism underlying tumour heterogeneity and aggressiveness.