The luminal-to-basal transition in mammary epithelial cells (MECs) is accompanied by changes in epithelial cell lineage plasticity; however, the underlying mechanism remains elusive. Here, we report that deficiency of Frmd3 inhibits mammary gland lineage development and induces stemness of MECs, subsequently leading to the occurrence of triple-negative breast cancer. Loss of Frmd3 in PyMT mice results in a luminal-to-basal transition phenotype. Single-cell RNA sequencing of MECs indicated that knockout of Frmd3 inhibits the Notch signaling pathway. Mechanistically, FERM domain-containing protein 3 (FRMD3) promotes the degradation of Disheveled-2 by disrupting its interaction with deubiquitinase USP9x. FRMD3 also interrupts the interaction of Disheveled-2 with CK1, FOXK1/2, and NICD and decreases Disheveled-2 phosphorylation and nuclear localization, thereby impairing Notch-dependent luminal epithelial lineage plasticity in MECs. A low level of FRMD3 predicts poor outcomes for breast cancer patients. Together, we demonstrated that FRMD3 is a tumor suppressor that functions as an endogenous activator of the Notch signaling pathway, facilitating the basal-to-luminal transformation in MECs.