© 2015 by the authors; licensee MDPI, Basel, Switzerland. The epithelium of the lactiferous ducts in the breast is comprised of luminal epithelial cells and underlying basal myoepithelial cells. The regulation of cell fate and transit of cells between these two cell types remains poorly understood. This relationship becomes of greater importance when studying the subtypes of epithelial breast carcinoma, which are categorized according to their expression of luminal or basal markers. The epithelial mesenchymal transition (EMT) is a pivotal event in tumor invasion. It is important to understand mechanisms that regulate this process, which bears relation to the normal dynamic of epithelial/basal phenotype regulation in the mammary gland. Understanding this process could provide answers for the regulation of EMT in breast cancer, and thereby identify potential targets for therapy. Evidence points towards a role for hedgehog signaling in breast tissue homeostasis and also in mammary neoplasia. This review examines our current understanding of role of the hedgehog-signaling (Hh) pathway in breast epithelial cells both during breast development and homeostasis and to assess the potential misappropriation of Hh signals in breast neoplasia, cancer stem cells and tumor metastasis via EMT.