Seventy-five percent of breast cancers are estrogen receptor α positive (ER(+)). Research on these tumors is hampered by lack of adequate in vivo models; cell line xenografts require non-physiological hormone supplements, and patient-derived xenografts (PDXs) are hard to establish. We show that the traditional grafting of ER(+) tumor cells into mammary fat pads induces TGFβ/SLUG signaling and basal differentiation when they require low SLUG levels to grow in vivo. Grafting into the milk ducts suppresses SLUG; ER(+) tumor cells develop, like their clinical counterparts, in the presence of physiological hormone levels. Intraductal ER(+) PDXs are retransplantable, predictive, and appear genomically stable. The model provides opportunities for translational research and the study of physiologically relevant hormone action in breast carcinogenesis.