The basal-like subtype of breast cancer is associated with invasiveness, high rates of postsurgical recurrence, and poor prognosis. Aside from inactivation of the BRCA1 tumor-suppressor gene, little is known concerning the mechanisms that cause basal breast cancer or the mechanisms responsible for its invasiveness. Here, we show that the heterogeneous mouse mammary tumor virus-cyclin D1-Cdk2 (MMTV-D1K2) transgenic mouse mammary tumors contain regions of spindle-shaped cells expressing both luminal and myoepithelial markers. Cell lines cultured from these tumors exhibit the same luminal/myoepithelial mixed-lineage phenotype that is associated with human basal-like breast cancer and express a number of myoepithelial markers including cytokeratin 14, P-cadherin, alpha smooth muscle actin, and nestin. The MMTV-D1K2 tumor-derived cell lines form highly invasive tumors when injected into mouse mammary glands. Invasion is associated with E-cadherin localization to the cytoplasm or loss of E-cadherin expression. Cytoplasmic E-cadherin correlates with lack of colony formation in vitro and beta-catenin and p120(ctn) localization to the cytoplasm. The data suggest that the invasiveness of these cell lines results from a combination of factors including mislocalization of E-cadherin, beta-catenin, and p120(ctn) to the cytoplasm. Nestin expression and E-cadherin mislocalization were also observed in human basal-like breast cancer cell lines, suggesting that these results are relevant to human tumors. Together, these results suggest that abnormal Cdk2 activation may contribute to the formation of basal-like breast cancers.