Tumor recurrence is the leading cause of breast cancer-related death. Recurrences are largely driven by cancer cells that survive therapeutic intervention. This poorly understood population is referred to as minimal residual disease. Here, using mouse models that faithfully recapitulate human disease together with organoid cultures, we have demonstrated that residual cells acquire a transcriptionally distinct state from normal epithelium and primary tumors. Gene expression changes and functional characterization revealed altered lipid metabolism and elevated ROS as hallmarks of the cells that survive tumor regression. These residual cells exhibited increased oxidative DNA damage, potentiating the acquisition of somatic mutations during hormonal-induced expansion of the mammary cell population. Inhibition of either cellular fatty acid synthesis or fatty acid transport into mitochondria reduced cellular ROS levels and DNA damage, linking these features to lipid metabolism. Direct perturbation of these hallmarks in vivo, either by scavenging ROS or by halting the cyclic mammary cell population expansion, attenuated tumor recurrence. Finally, these observations were mirrored in transcriptomic and histological signatures of residual cancer cells from neoadjuvant-treated breast cancer patients. These results highlight the potential of lipid metabolism and ROS as therapeutic targets for reducing tumor recurrence in breast cancer patients.