Cancer cells are committed to an actively secretory state that facilitates communication with their microenvironment. We have addressed the role of ERp29, a novel endoplasmic reticulum secretion factor in mammary carcinogenesis using MCF-7 human breast cancer cells as a model. Xenografts originating from cells stably transfected with dominant-negative form of ERp29 were smaller and better differentiated than those derived from cells overexpressing wild-type ERp29. Similar effects were observed by siRNA-mediated ERp29 silencing in xenografts. However, unlike xenografts, the modulation of ERp29 in vitro did not affect the rate of cell proliferation. In addition, we have evaluated the expression of ERp29 in the resting and lactating mammary glands of mice as well as in the human primary breast tumors. About 25% of breast cancers and also lactating mammary glands were expressing ERp29 while the resting glands did not. Taken together these data suggest the active involvement of ERp29 in the malignant conversion of mammary epithelial cells.