The amplified-in-breast cancer 3 (AIB3) is a nuclear receptor coactivator amplified and overexpressed in human breast cancers. AIB3(-/-) mice die during gestation, whereas AIB3(+/-) mice exhibit normal development. Here, we demonstrate that AIB3 protein is mainly located in the nuclei of mammary epithelial cells and tumor cells and its levels are elevated in mammary epithelial cells at middle pregnant stage and in mammary tumor cells. To examine whether AIB3 reduction affects mammary tumorigenesis, we generated wild-type mouse mammary tumor virus/polyoma middle-T (WT/PyMT) and AIB3(+/-)/PyMT mice. Mammary tumor development in AIB3(+/-)/PyMT female and male mice was substantially accelerated compared with that in WT/PyMT mice, because of increased cell proliferation in early tumorigenic lesions, including ductal hyperplasia and mammary intraepithelial neoplasia. Tumor formation in nude mice that received premalignant AIB3(+/-)/PyMT mammary tissue was much faster than in nude mice that received transplants of premalignant WT/PyMT mammary tissue, which indicated that the accelerated tumorigenesis in AIB3(+/-)/PyMT mammary glands is due to a mammary epithelial autonomous defect. Expression of PyMT, estrogen receptor alpha and estrogen receptor alpha-regulated genes was unaffected in AIB3(+/-)/PyMT mammary glands, which suggests that the acceleration of mammary tumor formation in AIB3(+/-)/PyMT mice was not a consequence of changes in PyMT expression or in estrogen receptor function. Importantly, the inhibitory effects of peroxisome proliferator-activated receptor gamma (PPARgamma) and retinoid-X receptor (RXR) ligands on AIB3(+/-)/PyMT cell proliferation and the transcriptional function of PPARgamma in AIB3(+/-)/PyMT cells were reduced. Thus, AIB3 haplodeficiency may facilitate PyMT-induced tumorigenesis through a partial impairment of PPARgamma and RXR function. These results suggest that AIB3 may be a tumor suppressor that is required for the inhibition of cell proliferation by PPARgamma and RXR.