Retinoic acid is a potent differentiation and antiproliferative agent of breast cancer cells, and one of its receptors, retinoic acid receptor β (RARβ), has been proposed to act as a tumor suppressor. In contrast, we report herein that inactivation of Rarb in the mouse results in a protective effect against ErbB2-induced mammary gland tumorigenesis. Strikingly, tissue recombination experiments indicate that the presence of Rarb in the stromal compartment is essential for the growth of mammary carcinoma. Ablation of Rarb leads to a remodeling of the stroma during tumor progression that includes a decrease in angiogenesis, in the recruitment of inflammatory cells, and in the number myofibroblasts. In agreement with this finding, we observed that a markedly reduced expression of chemokine (C-X-C motif) ligand 12 (Cxcl12) in the stroma of Rarb-null mice is accompanied by a decrease in the CXCL12/chemokine C-X-C receptor 4 (CXCR4)/ErbB2 signaling axis in the tumors. Relevance to the human disease is underlined by the finding that gene- expression profiling of the Rarb-deficient mammary stromal compartment identified an ortholog RARβ signature in human microdissected breast tissues that differentiates tumor from normal stroma. Our study thus implicates RARβ in promoting tumorigenesis and suggests that retinoid- based approaches for the prevention and treatment of breast cancer should be redesigned.