Germline mutations in BRCA1 predispose carriers to a high incidence of breast and ovarian cancers. BRCA1 functions to maintain genomic stability through critical roles in DNA repair, cell-cycle arrest, and transcriptional control. A major question has been why BRCA1 loss or mutation leads to tumors mainly in estrogen-regulated tissues, given that BRCA1 has essential functions in all cell types. Here, we report that estrogen and estrogen metabolites can cause DNA double-strand breaks (DSB) in estrogen receptor-α-negative breast cells and that BRCA1 is required to repair these DSBs to prevent metabolite-induced genomic instability. We found that BRCA1 also regulates estrogen metabolism and metabolite-mediated DNA damage by repressing the transcription of estrogen-metabolizing enzymes, such as CYP1A1, in breast cells. Finally, we used a knock-in human cell model with a heterozygous BRCA1 pathogenic mutation to show how BRCA1 haploinsufficiency affects these processes. Our findings provide pivotal new insights into why BRCA1 mutation drives the formation of tumors in estrogen-regulated tissues, despite the general role of BRCA1 in DNA repair in all cell types.