Recurrent mutations in histone-modifying enzymes imply key roles in tumorigenesis, yet their functional relevance is largely unknown. Here, we show that JARID1B, encoding a histone H3 lysine 4 (H3K4) demethylase, is frequently amplified and overexpressed in luminal breast tumors and a somatic mutation in a basal-like breast cancer results in the gain of unique chromatin binding and luminal expression and splicing patterns. Downregulation of JARID1B in luminal cells induces basal genes expression and growth arrest, which is rescued by TGFβ pathway inhibitors. Integrated JARID1B chromatin binding, H3K4 methylation, and expression profiles suggest a key function for JARID1B in luminal cell-specific expression programs. High luminal JARID1B activity is associated with poor outcome in patients with hormone receptor-positive breast tumors.