The human breast is composed of terminal duct lobular units (TDLUs) that are surrounded by stroma. In the TDLUs, basement membrane separates the stroma from the epithelial compartment, which is divided into an inner layer of luminal epithelial cells and an outer layer of myoepithelial cells. Stem cells and progenitor cells also reside within the epithelium and drive a continuous cycle of gland remodelling that occurs throughout the reproductive period. D492 is an epithelial cell line originally isolated from the stem cell population of the breast and generates both luminal and myoepithelial cells in culture. When D492 cells are embedded into 3D reconstituted basement membrane matrix (3D-rBM) they form branching colonies mimicking the TDLUs of the breast, thereby providing a well-suited in vitro model for studies on branching morphogenesis and breast development. Peroxidasin (PXDN) is a heme-containing peroxidase that crosslinks collagen IV with the formation of sulfilimine bonds. Previous studies indicate that PXDN plays an integral role in basement membrane stabilisation by crosslinking collagen IV and as such contributes to epithelial integrity. Although PXDN has been linked to fibrosis and cancer in some organs there is limited information on its role in development, including in the breast. In this study, we demonstrate expression of PXDN in breast epithelium and stroma and apply the D492 cell line to investigate the role of PXDN in cell differentiation and branching morphogenesis in the human breast. Overexpression of PXDN induced basal phenotype in D492 cells, loss of plasticity and inhibition of epithelial-to-mesenchymal transition as is displayed by complete inhibition of branching morphogenesis in 3D culture. This is supported by results from RNA-sequencing which show significant enrichment in genes involved in epithelial differentiation along with significant negative enrichment of EMT factors. Taken together, we provide evidence for a novel role of PXDN in breast epithelial differentiation and mammary gland development.