Cell fate perturbations underlie many human diseases, including breast cancer. Unfortunately, the mechanisms by which breast cell fate are regulated are largely unknown. The mammary gland epithelium consists of differentiated luminal epithelial and basal myoepithelial cells, as well as undifferentiated stem cells and more restricted progenitors. Breast cancer originates from this epithelium, but the molecular mechanisms that underlie breast epithelial hierarchy remain ill-defined. Here, we use a high-content confocal image-based short hairpin RNA screen to identify tumour suppressors that regulate breast cell fate in primary human breast epithelial cells. We show that ablation of the large tumour suppressor kinases (LATS) 1 and 2 (refs 5, 6), which are part of the Hippo pathway, promotes the luminal phenotype and increases the number of bipotent and luminal progenitors, the proposed cells-of-origin of most human breast cancers. Mechanistically, we have identified a direct interaction between Hippo and oestrogen receptor-α (ERα) signalling. In the presence of LATS, ERα was targeted for ubiquitination and Ddb1-cullin4-associated-factor 1 (DCAF1)-dependent proteasomal degradation. Absence of LATS stabilized ERα and the Hippo effectors YAP and TAZ (hereafter YAP/TAZ), which together control breast cell fate through intrinsic and paracrine mechanisms. Our findings reveal a non-canonical (that is, YAP/TAZ-independent) effect of LATS in the regulation of human breast cell fate.