Transducer of ErbB-2 (TOB) is a member of the TOB/Btg gene family. A role for TOB in the suppression of human tumorigenesis has been proposed, based on the observations that TOB-knockout mice spontaneously form tumors and TOB expression is lost in human lung and thyroid cancers. However, the role of TOB in human breast cancer remains unknown. To evaluate the this role, we screened a panel of breast cancer cell lines for TOB expression levels and found that they are inversely correlated with the tumorigenicity and metastatic potential of the cell lines. In addition, we demonstrated for the first time that TOB expression is inversely correlated with breast cancer progression in clinical specimens. These results strongly indicate that the loss of TOB expression plays a role in breast cancer progression. We have also provided the first evidence that TOB functions as a tumor suppressor in breast cancer MCF-7 cells, using gain-of-function and loss-of-function approaches to manipulate TOB expression. Cell-cycle analysis further revealed that TOB can prolong the G1-S phase transition by inducing arrest at G1-S phase. Moreover, upregulation of the cyclin-dependent kinase inhibitor p27 and downregulation of the antiapoptotic proteins Bcl-2 and Bcl-XL were observed in MCF7/TOB transfectants. Conversely, opposite results were observed in shRNA-TOB transfectants. Furthermore, decreased activity of Erk2, AKT, CrkL, PDK1, and Smads were observed in TOB-overexpressing cells. Taken together, these data provide evidence that TOB can function as a tumor suppressor in breast cancer through modulation and regulation of multiple signaling pathways.