Women with germline BRCA1 mutations (BRCA1^+/mut) have increased risk for hereditary breast cancer. Cancer initiation in BRCA1^+/mut is associated with premalignant changes in breast epithelium; however, the role of the epithelium-associated stromal niche during BRCA1-driven tumor initiation remains unclear. Here we show that the premalignant stromal niche promotes epithelial proliferation and mutant BRCA1-driven tumorigenesis in trans. Using single-cell RNA sequencing analysis of human preneoplastic BRCA1^+/mut and noncarrier breast tissues, we show distinct changes in epithelial homeostasis including increased proliferation and expansion of basal-luminal intermediate progenitor cells. Additionally, BRCA1^+/mut stromal cells show increased expression of pro-proliferative paracrine signals. In particular, we identify pre-cancer-associated fibroblasts (pre-CAFs) that produce protumorigenic factors including matrix metalloproteinase 3 (MMP3), which promotes BRCA1-driven tumorigenesis in vivo. Together, our findings demonstrate that precancerous stroma in BRCA1^+/mut may elevate breast cancer risk through the promotion of epithelial proliferation and an accumulation of luminal progenitor cells with altered differentiation.