Summary Epithelial cells possess remarkable plasticity, having the ability to become mesenchymal cells through alterations in adhesion and motility (epithelial-to-mesenchymal transition [EMT]). However, how epithelial plasticity is kept in check in epithelial cells during tissue development and regeneration remains to be fully understood. Here we show that restricting the EMT of mammary epithelial cells by transcription factor Ovol2 is required for proper morphogenesis and regeneration. Deletion of Ovol2 blocks mammary ductal morphogenesis, depletes stem and progenitor cell reservoirs, and leads epithelial cells to undergo EMT in vivo to become nonepithelial cell types. Ovol2 directly represses myriad EMT inducers, and its absence switches response to TGF-β from growth arrest to EMT. Furthermore, forced expression of the repressor isoform of Ovol2 is able to reprogram metastatic breast cancer cells from a mesenchymal to an epithelial state. Our findings underscore the critical importance of exquisitely regulating epithelial plasticity in development and cancer.