How breast cancers are able to disseminate and metastasize is poorly understood. Using a hyperplasia transplant system, we show that tumor dissemination and metastasis occur in discrete steps during tumor progression. Bioinformatic analysis revealed that loss of the transcription factor GATA-3 marked progression from adenoma to early carcinoma and onset of tumor dissemination. Restoration of GATA-3 in late carcinomas induced tumor differentiation and suppressed tumor dissemination. Targeted deletion of GATA-3 in early tumors led to apoptosis of differentiated cells, indicating that its loss is not sufficient for malignant conversion. Rather, malignant progression occurred with an expanding GATA-3-negative tumor cell population. These data indicate that GATA-3 regulates tumor differentiation and suppresses tumor dissemination in breast cancer.