The molecular mechanisms that modulate the activity of the signal transducers and activators of transcription 5 (Stat5) during the progression of breast cancer remain elusive. Here, we present evidence that the calcineurin/nuclear factor of activated T cells (NFAT) pathway negatively regulates the activation of Stat5, and vice versa in breast cancer. NFAT1 interacts with Stat5 in breast cancer cells, and their physical association is mediated by the DNA binding and transactivation domains of Stat5. Ectopically expressed NFAT1 is capable of inhibiting Stat5-dependent functions, including Stat5 transactivation, Stat5-mediated transcription of the downstream target gene expression, and binding of Stat5a to the Stat5 target promoter. By contrast, overexpression of a selective NFAT inhibitor VIVIT reversed NFAT1-mediated suppression of Stat5-dependent gene expression, whereas silencing of NFAT1 through RNA interference enhanced prolactin-induced, Stat5-mediated gene transcription, and breast cancer cell proliferation. A reciprocal inhibitory effect of Stat5 activity on NFAT1 signaling was also observed, implying these two signaling cascades antagonize each other in breast cancer. Importantly, analysis of a matched breast cancer progression tissue microarray revealed a negative correlation between levels of NFAT1 and Stat5 (pY694) during the progression of breast cancer. Taken together, these studies highlight a novel negative cross talk between the NFAT1- and Stat5-signaling cascades that may affect breast tumor formation, growth, and metastasis.