27-Hydroxycholesterol (27-HC) is the most abundant oxysterol that increases the risk of breast cancer progression. However, little is known about epigenetic regulation of 27-HC metabolism and its role in breast tumor initiation. Using genetic mouse mammary tumor and human breast cancer models, we showed here that the histone reader ZMYND8 was selectively expressed in breast cancer stem cells (BCSCs) and promoted epithelial-mesenchymal transition (EMT), BCSC maintenance and self-renewal, and oncogenic transformation through its epigenetic functions, leading to breast tumor initiation. Mechanistically, ZMYND8 was a master transcriptional regulator of 27-HC metabolism. It increased cholesterol biosynthesis and oxidation but blocked cholesterol efflux and 27-HC catabolism, leading to accumulation of 27-HC in BCSCs. Consequently, 27-HC promoted EMT, oncogenic transformation, and tumor initiation through activation of liver X receptor. These findings reveal that ZMYND8 is an epigenetic booster that drives breast tumor initiation through metabolic reprogramming.