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Abstract Background Histological grade has been demonstrated to be an important factor of breast cancer outcome and is associated with cell differentiation and is currently being evaluated via H&E-stained sections. Molecular biomarkers are essential to improve the accuracy of histological grading. ATBF1, a large transcription factor, has been considered a tumor suppressor gene with frequent mutations or deletions in multiple cancers. In breast cancer, ATBF1 was reported to function in cell differentiation and mammary development. However, its role in the clinic has rarely been reported. Methods Breast cancer tissues (BCTs) and adjacent noncancerous tissues (ANCTs) were collected to analyze the expression of ATBF1 at the mRNA and protein levels. Three anti-ATBF1 antibodies recognizing independent peptides of ATBF1 (N-terminal end, middle region and C-terminal end) were applied for IHC staining. Small interfering RNA (siRNA) was used to silence ATBF1 expression and to investigate the roles of ATBF1 in MCF7 cells. Microarrays were introduced to analyze the differentially expressed genes, enriched GO terms and KEGG terms regulated by ATBF1 and its potential downstream genes, which were further confirmed in vitro and in clinical samples. Results The expression of ATBF1 was reduced in BCTs at both the mRNA and protein levels compared with that in ANCTs. ATBF1 protein was predominantly localized in the nucleus of ANCTs but in the cytoplasm of BCTs. Both the mRNA and protein levels of ATBF1 were significantly correlated with histological grade. Consistently, knockdown of ATBF1 increased stemness marker expression and reduced differentiation markers in vitro. Further analysis identified WNT5A as an essential downstream gene of ATBF1 in breast cancer cells. Treatment of WNT5A disrupted cell proliferation induced by ATBF1 silencing. In BCTs, a significant correlation was observed between the expression of WNT5A and ATBF1. Conclusion The results indicated that ATBF1 expression might be a useful diagnostic marker associated with histological grade and breast cancer malignancy. WNT5A and its signaling pathway are novel mechanisms by which ATBF1 contributes to breast cancer tumorigenesis.