The human breast parenchyma consists of collecting ducts and terminal duct lobular units (TDLUs). The TDLU is the site of origin of most breast cancers. The reason for such focal susceptibility to cancer remains poorly understood. Here, we take advantage of a region-specific heterogeneity in luminal progenitors to interrogate the differentiation repertoire of candidate stem cells in TDLUs. We show that stem-like activity in serial passage culture and in vivo breast morphogenesis relies on the preservation of a myoepithelial phenotype. By enrichment for region-specific progenitors, we identify bipotent and multipotent progenitors in ducts and TDLUs, respectively. We propose that focal breast cancer susceptibility, at least in part, originates from region-specific myoepithelial progenitors.