A discontinuous pattern of LOH at chromosome 3p has been reported in 87% of primary breast cancers. Despite the identification of several tumor suppressor genes in this region, there has yet to be a detailed analysis of noncoding RNAs including miRNAs in this region. In this study, we identified 16 aberrant miRNAs in this region and determined several that are frequently lost or amplified in breast cancer. miR-128-2 was the most commonly deleted miRNA. Embedded in the intron of the ARPP21 gene at chromosome 3p22.3, miR-128-2 was frequently downregulated along with ARPP21 in breast cancer, where it was negatively associated with clinicopathologic characteristics and survival outcome. Forced expression of miR-128 impeded several oncogenic traits of mammary carcinoma cells, whereas depleting miR-128-2 expression was sufficient for oncogenic transformation and stem cell-like behaviors in immortalized nontumorigenic mammary epithelial cells, both in vitro and in vivo. miR-128-2 silencing enabled transforming capacity partly by derepressing a cohort of direct targets (BMI1, CSF1, KLF4, LIN28A, NANOG, and SNAIL), which together acted to stimulate the PI3K/AKT and STAT3 signaling pathways. We also found that miR-128-2 was directly downregulated by SNAIL and repressed by TGF-b signaling, adding 2 additional negative feedback loops to this network. In summary, we have identified a novel TGF-b/SNAIL/miR-128 axis that provides a new avenue to understand the basis for oncogenic transformation of mammary epithelial cells. Cancer Res; 72(22); 6036-50. Ó2012 AACR.