Epithelial-mesenchymal transition is one of the critical cellular programs that facilitate the progression of breast cancer to an invasive disease. We have observed that the expression of N-myc interactor (NMI) decreases significantly during progression of breast cancer, specifically in invasive and metastatic stages. Recapitulation of this loss in breast cell lines with epithelial morphology (MCF10A (non-tumorigenic) and T47D (tumorigenic)) by silencing NMI expression causes mesenchymal-like morphological changes in 3D growth, accompanied by upregulation of SLUG and ZEB2 and increased invasive properties. Conversely, we found that restoring NMI expression attenuated the mesenchymal attributes of metastatic breast cancer cells, accompanied by distinctly circumscribed 3D growth with basement membrane deposition and decreased invasion. Further investigations into the downstream signaling modulated by NMI revealed that NMI expression negatively regulates SMAD signaling, which is a key regulator of cellular plasticity. We demonstrate that NMI blocks TGF-β/SMAD signaling via upregulation of SMAD7, a negative feedback regulator of the pathway. We also provide evidence that NMI activates STAT signaling, which negatively modulates TGF-β/SMAD signaling. Taken together, our findings suggest that loss of NMI during breast cancer progression could be one of the driving factors that enhance the invasive ability of breast cancer by aberrant activation of TGF-β/SMAD signaling. © 2014 Macmillan Publishers Limited.