Correlative data suggest that thyroid hormone receptor-β (TRβ) mutations could increase the risk of mammary tumor development, but unequivocal evidence is still lacking. To explore the role of TRβ mutants in vivo in breast tumor development and progression, we took advantage of a knock-in mouse model harboring a mutation in the Thrb gene encoding TRβ (Thrb(PV) mouse). Although in adult nulliparous females, a single ThrbPV allele did not contribute to mammary gland abnormalities, the presence of two ThrbPV alleles led to mammary hyperplasia in ∼36% Thrb(PV/PV) mice. The ThrbPV mutation further markedly augmented the risk of mammary hyperplasia in a mouse model with high susceptibility to mammary tumors (Pten(+/-) mouse), as demonstrated by the occurrence of mammary hyperplasia in ∼60% of Thrb(PV/+)Pten(+/-) and ∼77% of Thrb(PV/PV)Pten(+/-) mice versus ∼33% of Thrb(+/+)Pten(+/-) mice. The Thrb(PV) mutation increased the activity of signal transducer and activator of transcription (STAT5) to increase cell proliferation and the expression of the STAT5 target gene encoding β-casein in the mammary gland. We next sought to understand the molecular mechanism underlying STAT5 overactivation by TRβPV. Cell-based studies with a breast cancer cell line (T47D cells) showed that thyroid hormone (T3) repressed STAT5 signaling in TRβ-expressing cells through decreasing STAT5-mediated transcription activity and target gene expression, whereas sustained STAT5 signaling was observed in TRβPV-expressing cells. Collectively, these findings show for the first time that a TRβ mutation promotes the development of mammary hyperplasia via aberrant activation of STAT5, thereby conferring a fertile genetic ground for tumorigenesis.