Prolactin hormone (PRL) is well characterized as a terminal differentiation factor for mammary epithelial cells and as an autocrine growth/survival factor in breast cancer cells. However, this function of PRL may not fully signify its role in breast tumorigenesis. Cancer is a complex multistep progressive disease resulting not only from defects in cell growth but also in cell differentiation. Indeed, dedifferentiation of tumor cells is now recognized as a crucial event in invasion and metastasis. PRL plays a critical role in inducing/maintaining differentiation of mammary epithelial cells, suggesting that PRL signaling could serve to inhibit tumor progression. We show here that in breast cancer cells, PRL and Janus-activated kinase 2, a major kinase involved in PRL signaling, play a critical role in regulating epithelial-mesenchymal transformation (EMT), an essential process associated with tumor metastasis. Activation of the PRL receptor (PRLR), achieved by restoring PRL/JAK2 signaling in mesenchymal-like breast cancer cells, MDA-MB-231, suppressed their mesenchymal properties and reduced their invasive behavior. While blocking PRL autocrine function in epithelial-like breast cancer cells, T47D, using pharmacologic and genetic approaches induced mesenchymal-like phenotypic changes and enhanced their invasive propensity. Moreover, our results indicate that blocking PRL signaling led to activation of mitogen-activated protein kinase (extracellular signal-regulated kinase 1/2) and transforming growth factor-beta/Smad signaling pathways, two major prometastatic pathways. Furthermore, our results indicate that following PRL/JAK2 inhibition, ERK1/2 activation precedes and is required for Smad2 activation and EMT induction in breast cancer cells. Together, these results highlight PRL as a critical regulator of epithelial plasticity and implicate PRL as an invasion suppressor hormone in breast cancer.