Signal transducer and activator of transcription 5 (STAT5) promotes cell survival and instigates breast tumor formation, and in the normal breast it also drives alveolar differentiation and lactogenesis. However, whether STAT5 drives a differentiated phenotype in breast tumorigenesis and therefore impacts cancer spread and metastasis is unclear. We found in two genetically engineered mouse models of breast cancer that constitutively activated Stat5a (Stat5a) caused precancerous mammary epithelial cells to become lactogenic and evolve into tumors with diminished potential to metastasize. We also showed that STAT5a reduced the migratory and invasive ability of human breast cancer cell lines in vitro. Furthermore, we demonstrated that STAT5a overexpression in human breast cancer cells lowered their metastatic burden in xenografted mice. Moreover, RPPA, Western blotting, and studies of ChIPseq data identified several EMT drivers regulated by STAT5. In addition, bioinformatic studies detected a correlation between STAT5 activity and better prognosis of breast cancer patients. Together, we conclude that STAT5 activation during mammary tumorigenesis specifies a tumor phenotype of lactogenic differentiation, suppresses EMT, and diminishes potential for subsequent metastasis.