BRCA1 mutation or depletion correlates with basal-like phenotype and poor prognosis in breast cancer but the underlying reason remains elusive. RNA and protein analysis of a panel of breast cancer cell lines revealed that BRCA1 deficiency is associated with downregulation of the expression of the pleiotropic tumour suppressor FOXO3. Knockdown of BRCA1 by small interfering RNA (siRNA) resulted in downregulation of FOXO3 expression in the BRCA1-competent MCF-7, whereas expression of BRCA1 restored FOXO3 expression in BRCA1-defective HCC70 and MDA-MB-468 cells, suggesting a role of BRCA1 in the control of FOXO3 expression. Treatment of HCC70 and MDA-MB-468 cells with either the DNA methylation inhibitor 5-aza-2'-deoxycitydine, the N-methyltransferase enhancer of zeste homologue 2 (EZH2) inhibitor GSK126 or EZH2 siRNA induced FOXO3 mRNA and protein expression, but had no effect on the BRCA1-competent MCF-7 cells. Chromatin immunoprecipitation (ChIP) analysis demonstrated that BRCA1, EZH2, DNMT1/3a/b and histone H3 lysine 27 trimethylation (H3K27me3) are recruited to the endogenous FOXO3 promoter, further advocating that these proteins interact to modulate FOXO3 methylation and expression. In addition, ChIP results also revealed that BRCA1 depletion promoted the recruitment of the DNA methyltransferases DNMT1/3a/3b and the enrichment of the EZH2-mediated transcriptional repressive epigenetic marks H3K27me3 on the FOXO3 promoter. Methylated DNA immunoprecipitation assays also confirmed increased CpG methylation of the FOXO3 gene on BRCA1 depletion. Analysis of the global gene methylation profiles of a cohort of 33 familial breast tumours revealed that FOXO3 promoter methylation is significantly associated with BRCA1 mutation. Furthermore, immunohistochemistry further suggested that FOXO3 expression was significantly associated with BRCA1 status in EZH2-positive breast cancer. Consistently, high FOXO3 and EZH2 mRNA levels were significantly associated with good and poor prognosis in breast cancer, respectively. Together, these data suggest that BRCA1 can prevent and reverse FOXO3 suppression via inhibiting EZH2 and, consequently, its ability to recruit the transcriptional repressive H3K27me3 histone marks and the DNA methylases DNMT1/3a/3b, to induce DNA methylation and gene silencing on the FOXO3 promoter.