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Purpose: Parathyroid hormone-related protein (PTHrP) is required for normal mammary gland development and biology. A PTHLH gene polymorphism is associated with breast cancer risk, and PTHrP promotes growth of osteolytic breast cancer bone metastases. Accordingly, current dogma holds that PTHrP is upregulated in malignant primary breast tumors, but solid evidence for this assumption is missing. Experimental Design: We used quantitative IHC to measure PTHrP in normal and malignant breast epithelia, and correlated PTHrP levels in primary breast cancer with clinical outcome. Results: PTHrP levels were markedly downregulated in malignant compared with normal breast epithelia. Moreover, low levels of nuclear localized PTHrP in cancer cells correlated with unfavorable clinical outcome in a test and a validation cohort of breast cancer treated at different institutions totaling nearly 800 cases. PTHrP mRNA levels in tumors of a third cohort of 737 patients corroborated this association, also after multivariable adjustment for standard clinicopathologic parameters. Breast cancer PTHrP levels correlated strongly with transcription factors Stat5a/b, which are established markers of favorable prognosis and key mediators of prolactin signaling. Prolactin stimulated PTHrP transcript and protein in breast cancer cell lines in vitro and in vivo, effects mediated by Stat5 through the P2 gene promoter, producing transcript AT6 encoding the PTHrP 1-173 isoform. Low levels of AT6, but not two alternative transcripts, correlated with poor clinical outcome. Conclusions: This study overturns the prevailing view that PTHrP is upregulated in primary breast cancers and identifies a direct prolactin–Stat5–PTHrP axis that is progressively lost in more aggressive tumors.