Human CUB and Sushi multiple domains 1 (CSMD1) is a membrane-bound complement inhibitor suggested to act as a putative tumor suppressor gene, since allelic loss of this region encompassing 8p23 including CSMD1 characterizes various malignancies. Here, we assessed the role of CSMD1 as a tumor suppressor gene in the development of breast cancer in vitro and in vivo. We found that human breast tumor tissues expressed CSMD1 at lower levels compared to that in normal mammary tissues. The decreased expression of CSMD1 was linked to a shorter overall survival of breast cancer patients. We also revealed that expression of CSMD1 in human breast cancer cells BT-20 and MDA-MB-231 significantly inhibited their malignant phenotypes, including migration, adhesion and invasion. Conversely, stable silencing of CSMD1 expression in T47D cells enhanced cancer cell migratory, adherent and clonogenic abilities. Moreover, expression of CSMD1 in the highly invasive MDA-MB-231 cells diminished their signaling potential as well as their stem cell-like properties as assessed by measurement of aldehyde dehydrogenase activity. In a xenograft model, expression of CSMD1 blocked the ability of cancer cells to metastasize to secondary sites in vivo, likely via inhibiting local invasion but not the extravasation into distant tissues. Taken together, these findings demonstrate the role of CSMD1 as a tumor suppressor gene in breast cancer.