Stem cells (SCs) drive mammary development, giving rise postnatally to an epithelial bilayer composed of luminal and basal myoepithelial cells. Dysregulation of SCs is thought to be at the origin of certain breast cancers; however, the molecular identity of SCs and the factors regulating their function remain poorly defined. We identified the transmembrane protein podoplanin (Pdpn) as a specific marker of the basal compartment, including multipotent SCs, and found Pdpn localized at the basal-luminal interface. Embryonic deletion of Pdpn targeted to basal cells diminished basal and luminal SC activity and affected the expression of several Wnt/β-catenin signaling components in basal cells. Moreover, Pdpn loss attenuated mammary tumor formation in a mouse model of β-catenin-induced breast cancer, limiting tumor-initiating cell expansion and promoting molecular features associated with mesenchymal-to-epithelial cell transition. In line with the loss-of-function data, we demonstrated that mechanistically Pdpn enhances Wnt/β-catenin signaling in mammary basal cells. Overall, this study uncovers a role for Pdpn in mammary SC function and, importantly, identifies Pdpn as a new regulator of Wnt/β-catenin signaling, a key pathway in mammary development and tumorigenesis.