Strong inherited predisposition to breast cancer is estimated to cause about 5–10% of all breast cancer cases. As the known susceptibility genes, such as BRCA1 and BRCA2, explain only a fraction of this, additional predisposing genes and related biological mechanisms are actively being searched for. We have recently identified a recurrent MCPH1 germline mutation, p.Arg304ValfsTer3, as a breast cancer susceptibility allele. MCPH1 encodes a multifunctional protein involved in maintenance of genomic integrity and it is also somatically altered in various cancer types, including breast cancer. Additionally, biallelic MCPH1 mutations are causative for microcephaly and at cellular level premature chromosome condensation. To study the molecular mechanisms leading to cancer predisposition and malignant conversion, here we have modeled the effect of MCPH1 p.Arg304ValfsTer3 mutation using gene‐edited MCF10A breast epithelial cells. As a complementary approach, we also sought for additional potential cancer driver mutations in MCPH1 p.Arg304ValfsTer3 carrier breast tumors. We show that mutated MCPH1 de‐regulates transcriptional programs related to invasion and metastasis and leads to downregulation of histone genes. These global transcriptional changes are mirrored by significantly increased migration and invasion potential of the cells as well as abnormal chromosomal condensation both before and after mitosis. These findings provide novel molecular insights to MCPH1 tumor suppressor functions and establish a role in regulation of transcriptional programs related to malignant conversion and chromosomal assembly. The MCPH1 p.Arg304ValfsTer3 carrier breast tumors showed recurrent tumor suppressor gene TP53 mutations, which were also significantly over‐represented in breast tumors with somatically inactivated MCPH1.