HGF/Met signaling has recently been associated with basal-type breast cancers, which are thought to originate from progenitor cells residing in the luminal compartment of the mammary epithelium. We found that ICAM-1 efficiently marks mammary luminal progenitors comprising hormone receptor-positive and receptor-negative cells, presumably ductal and alveolar progenitors. Both cell populations strongly express Met, while HGF is produced by stromal and basal myoepithelial cells. We show that persistent HGF treatment stimulates the clonogenic activity of ICAM1-positive luminal progenitors, controlling their survival and proliferation, and leads to the expression of basal cell characteristics, including stem cell potential. This is accompanied by the induction of Snai1 and Snai2, two major transcription factors triggering epithelial–mesenchymal transition, the repression of the luminal-regulatory genes Elf5 and Hey1, and claudin downregulation. Our data strongly indicate that paracrine Met signaling can control the function of luminal progenitors and modulate their fate during mammary development and tumorigenesis.