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Abstract Background The breast tumor microenvironment regulates progression of ductal carcinoma in situ (DCIS) to invasive ductal carcinoma (IDC). However, it is unclear how interactions between breast epithelial and stromal cells can drive this progression and whether there are reliable microenvironmental biomarkers to predict transition of DCIS to IDC. Methods We used xenograft mouse models and a 3D pathomimetic model termed mammary architecture and microenvironment engineering (MAME) to study the interplay between human breast myoepithelial cells (MEPs) and cancer-associated fibroblasts (CAFs) on DCIS progression. Results Our results show that MEPs suppress tumor formation by DCIS cells in vivo even in the presence of CAFs. In the in vitro MAME model, MEPs reduce the size of 3D DCIS structures and their degradation of extracellular matrix. We further show that the tumor-suppressive effects of MEPs on DCIS are linked to inhibition of urokinase plasminogen activator (uPA)/urokinase plasminogen activator receptor (uPAR)-mediated proteolysis by plasminogen activator inhibitor 1 (PAI-1) and that they can lessen the tumor-promoting effects of CAFs by attenuating interleukin 6 (IL-6) signaling pathways. Conclusions Our studies using MAME are, to our knowledge, the first to demonstrate a divergent interplay between MEPs and CAFs within the DCIS tumor microenvironment. We show that the tumor-suppressive actions of MEPs are mediated by PAI-1, uPA and its receptor, uPAR, and are sustained even in the presence of the CAFs, which themselves enhance DCIS tumorigenesis via IL-6 signaling. Identifying tumor microenvironmental regulators of DCIS progression will be critical for defining a robust and predictive molecular signature for clinical use.