The tumor suppressor gene p53 is frequently mutated in human breast cancer and is a marker for poor prognosis and resistance to chemotherapy. Transplantation of p53 null mouse mammary epithelium into syngeneic wild-type mice leads to normal mammary gland development followed by spontaneous mammary tumors that recapitulate many of the phenotypic, molecular and genetic features of human breast cancer. Transient exposure of p53 null mice to the anti-estrogen, tamoxifen leads to sustained and robust protection against tumor development. However the mechanism underlying this anti-tumor activity remains poorly understood. Here we demonstrate that transient exposure to tamoxifen leads to a reduction in mammary ductal side-branching and epithelial cell proliferation after tamoxifen withdrawal. Global gene expression analysis showed that transient tamoxifen exposure leads to persistent changes in the expression of a subset of estrogen regulated gene signatures in mammary epithelial cells (MECs). Among these was the protein tyrosine phosphatase, non-receptor type 5 (Ptpn5). We show that Ptpn5 is a novel tamoxifen regulated target gene which is upregulated in MECs after transient tamoxifen exposure and displays tumor suppressor activity in human breast cancer cells. Further, PTPN5 expression is strongly associated with good clinical outcome in tamoxifen treated human breast cancer patients suggesting that PTPN5 may represent a novel biomarker of tamoxifen response in human breast cancer.