NF-κB transcription factors are central regulators of inflammation and when dysregulated contribute to malignant transformation. IκB kinase ε (IKKε; IKKi, encoded by IKBKE) is a breast oncogene that is amplified in 30% of breast cancers and drives transformation in an NF-κB-dependent manner. Here we demonstrate that IKKε interacts with and phosphorylates tumor necrosis factor receptor-associated factor 2 (TRAF2) at Ser11 in vitro and in vivo. This activity promotes Lys63-linked TRAF2 ubiquitination and NF-κB activation and is essential for IKKε transformation. Breast cancer cells that depend on IKKε expression for survival are also dependent on TRAF2. This work defines TRAF2 phosphorylation to be one key effector of IKKε-induced mammary epithelial cell transformation.