"Reactive" or activated stroma characterizes many malignancies including breast cancers. Recently, we isolated a reactive mouse mammary gland stromal cell line called BJ3Z. These cells express alpha-smooth muscle actin and stromal cell-derived factor 1 (SDF-1) and are tumorigenic when injected into mice. Here we show that, in vivo, BJ3Z cells influence the angiogenesis and proliferation of xenografted estrogen receptor (ER)-positive MCF-7 human breast cancer cell-derived solid tumors. The growth-promoting effects of BJ3Z cells are equivalent to those of estradiol (E(2)). BJ3Z cells also increase the proliferation of normal mouse mammary luminal cells adjacent to tumors. In vitro, BJ3Z cells reorganize and increase the proliferation of cocultured malignant MCF-7 and normal human breast MCF10A cells grown as organoids in three-dimensional culture. The effects of BJ3Z cells on MCF-7 cells are equivalent to those of E(2). In contrast, BJ3Z cells do not alter the growth of highly aggressive ER-negative MDA-MB-231 human breast cancer cells. We show that BJ3Z cells secrete vascular endothelial growth factor (VEGF). The growth of MCF-7 organoids induced by BJ3Z can be inhibited by antagonists of VEGF and SDF-1. Conversely, recombinant VEGF stimulates the proliferation of MCF-7, but not MDA-MB-231, organoids. We conclude that, in addition to angiogenesis, VEGF released by activated stroma increases the growth of ER-positive malignant epithelial cells and of adjacent normal epithelium. Because activated stroma can substitute for E(2) and fosters hormone-independent growth of ER-positive tumors, we suggest that breast cancers exhibiting intrinsic hormone resistance may respond to antiangiogenic therapies.